Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — EMPLOYMENT

London

Mr. Tebbit: asked the Secretary of State for Employment what is the current level of unemployment in London.

The Under-Secretary of State for Employment (Mr. John Fraser): On 9th June the rate of unemployment for Greater London was 2·2 per cent.

Mr. Tebbit: Does the Minister accept that this figure merely reflects the record June total of unemployed nationally? How does he explain it, considering the promise on which he was elected? Is it policy, accident, design, incompetence or what that has thrown out of work so many men and women in this country?

Mr. Fraser: I do not think the hon. Member could have been listening to the answer. The rate of unemployment in Greater London is among the lowest in the country. A good many job opportunities and vacancies are available. I think that the hon. Member's remarks, as so often, bear very little relevance to the Question.

Mr. Tebbit: That is utterly complacent and ignorant.

Mr. Christopher Price: Is my hon. Friend aware that the percentage of unemployment in London conceals some serious pockets of very bad unemployment? Is he aware that South-East London in particular is suffering in the worst possible way? Will he bear this in mind in any action the Government are taking?

Mr. Fraser: Yes. My hon. Friend is absolutely right. I represent such a constituency myself.

Mr. Tebbit: It is a different story now.

Mr. Fraser: Where there are high pockets of unemployment, these are being studied by Government Departments. There are real problems of high unemployment and other forms of deprivation and these are being looked at.

Workshop Representatives

Mr. Golding: asked the Secretary of State for Employment if he will take steps to improve the education of workshop representatives.

The Under-Secretary of State for Employment (Mr. Harold Walker): The content of courses for improving the education of workshop representatives is largely for the parties concerned. We have, however, taken action in the Employment Protection Bill to facilitate such training by providing for time off for workers to undergo training in aspects of industrial relations relevant to the carrying out of their trade union duties.

Mr. Golding: Is the Minister aware that the very rapid growth in industrial democracy which we are expecting from this Government will require the development of trade union education? Is he further aware that, while we respect the fact that trade unions will want to control their education themselves, institutions must be provided in which that education can take place?

Mr. Walker: Certainly. It is my wish that courses of that kind should be sustained and expanded. My hon. Friend is right to identify the need for growth in this area in future. He will recognise that there are difficulties in determining whether such courses are educational or vocational and consequently which Department is responsible for their provision. Equally, I am sure my hon. Friend recognises that the TUC feels that training in industrial relations matters for trade union members and officials is primarily a job for it, but I shall look carefully at the point he has put to me.

Mr. Fell: How can the hon. Gentleman talk about industrial democracy when certain of the top unions in this country refuse point blank to have anything to do with voting by post?

Mr. Walker: I do not think that arises on this Question.

Disabled Persons

Mr. Gould: asked the Secretary of State for Employment what information he has about the numbers of firms which now meet their quotas for the employment of disabled people, broken down on a regional basis.

Mr. Harold Walker: As the reply contains a table of figures I will, with permission, circulate in the Official Report a regional analysis of compliance with the statutory quota scheme for the employment of disabled people.

Mr. Gould: Does the Minister accept that the available figures demonstrate the deficiencies in existing legislation which has clearly failed in its objective? What does he propose to do about it?

Mr. Walker: My hon. Friend will know that the statutory quota scheme has been under review since the last Conservative Government issued a consultative document at the end of 1973. I hope I shall be able to present our conclusions on that review to the House very shortly.

Mr. Marten: Would it not be an encouragement to firms if, for example, the Queen's Award to Industry was made only to firms which employed their quota of disabled people?

Mr. Walker: This is an interesting point that has been put to me before. Anything which encourages the employment of more disabled people has to be considered very carefully, but I doubt whether the hon. Member's suggestion matches the needs of what he and I agree is a very unhappy situation.

Mr. James Lamond: Has my hon. Friend received any information from the special investigations he set up in selected areas? Will he bear in mind that, in a period of rising unemployment nationally, unemployment among the disabled rises out of proportion to the rest of the community?

Mr. Walker: On my hon. Friend's latter point, there is some small comfort in the fact that the trend has been contrary to what he suggested. Unemployment in the country has risen fairly sharply over the last 12 months, but the number of unemployed among the regis-

tered disabled has risen from 10·4 per cent. in June 1974 to 12·1 per cent. in June 1975.
My hon. Friend referred to the exercise on which we embarked last December of selecting some pockets of high levels of unemployed disabled persons, or low levels of compliance with the statutory quota. That exercise has just been concluded. I have the results, but they still need evaluation and analysis. The result seems to me prima facie to be rather discouraging and disappointing in terms of the additional jobs created for registered disabled persons.

Mr. Dudley Smith: Is the Minister aware that there would not be enough disabled persons to go around if every firm were to fulfil its statutory quota? In view of what the Minister said when he was in opposition, does he not accept that the Act is now grossly out of date and in urgent need of revision? Does he accept that there must be some new impetus to provide good employment prospects for the disabled?

Mr. Walker: The hon. Member does not recall accurately the point I used to make when I was in opposition. My point was concerned with more rigorous enforcement of the statutory quota scheme. In the light of the experience gained from the exercise to which I have just referred, I think we are compelled to look again at whether that is the right approach. I think that the hon. Member is correct in his assertion of the need to look again at whether statutory provisions are appropriate and adequate for the needs of the present situation.

Following is the information as at May 1974:—



Number of firms reviewed
Number fulfilling the quota


London and South East Region
13,868
4,367


Eastern and Southern Region
6,823
2,441


South Western Region
3,781
1,655


Midland Region
9,833
4,057


Yorkshire and Humberside Region
4,952
2,515


North Western Region
6,510
3,026


Northern Region
2,224
1,045


Scotland
5,369
2,012


Wales
1,853
989


Total
55,213
22,107

National and regional information from this year's annual review is not yet available.

Social Contract

Mr. R. C. Mitchell: asked the Secretary of State for Employment what further discussions he has had with the TUC regarding the implementation of the social contract; and if he will make a statement.

The Secretary of State for Employment (Mr. Michael Foot): The Government have been in close consultation with the TUC in their review of the social contract and we shall be having further urgent discussions with it. I refer my hon. Friend to the statement to be made later this afternoon by the Chancellor of the Exchequer.

Mr. Lane: Does the right hon. Gentleman agree with the Chancellor of the Exchequer that the guidelines of the social contract must be drastically tightened?

Mr. Foot: It would be very much better that the hon. Member should await the statement which the Chancellor is to make.

Mr. Prior: This is the first intimation we have had that any statement is being made by the Chancellor. Why was this important statement not shown on the notice board in the ordinary way so that hon. Members could be kept fully informed of what was happening?

Mr. Tebbit: It is a secret statement.

Mr. Prior: Can we take it that the pathetic faith in the social contract, which the Secretary of State has always shown and which has brought this country to the edge of disaster, will not now be followed by a further pathetic attempt by the Government to patch up something we have known could never possibly exist?

Mr. Foot: The right hon. Gentleman might save his feeble fire for the Chancellor. If there has been any mistake concerning notification of the statement by the Chancellor, of course that will be looked at, but I understood that the announcement had already been made clear.

Mr. Adley: asked the Secretary of State for Employment if he remains satisfied with the social contract as the main

feature of the Government's policy to maintain full employment.

Mr. Trotter: asked the Secretary of State for Employment whether he is satisfied with the operation of the social contract in maintaining employment.

Mr. Ashley: asked the Secretary of State for Employment if he is satisfied with the operation of the social contract in maintaining full employment; and if he will make a statement.

Mr. Foot: As I have emphasised in reply to previous Questions today, I am certainly not satisfied in any sense whatever with the current level of employment, but a reversal of the present deplorable trend can be achieved only by intelligent policies agreed between the Government and the trade unions to combat inflation.

Mr. Adley: Has not the right hon. Gentleman noticed that his Government's reliance on the social contract means that we have rising inflation, rising unemployment, a falling pound and falling confidence nationally and internationally? Is not the social contract merely an excuse by which the Government avoid taking difficult decisions? Will the right hon. Gentleman stop expecting people like Jack Jones to play Prime Minister and ask his right hon. Friend the Prime Minister and his colleagues to start trying to run the country properly?

Mr. Foot: As I explained to the House —I thought that most right hon. and hon. Members accepted it or understood it—the social contract covers a whole range of policies which were agreed between the Government and the trade union movement, including arrangements about how pay settlements should be made. We intend that the whole of the social contract shall be carried into operation. The idea that it is concerned solely with wages is a complete misapprehension. I believe that the understanding of the social contract still points to the way in which we can overcome our problems.

Wales

Mr. Gwynfor Evans: asked the Secretary of State for Employment how many registered male employees there were in


Wales in June 1955, June 1965 and June 1975.

Mr. John Fraser: At June 1974, the latest date for which information is available, the estimated number of male employees in employment in Wales was 621,000. Precisely comparable figures are not available for the earlier dates due to discontinuities in the series, but approximate figures on the current basis would be about 700,000 in June 1955 and in June 1965.

Mr. Evans: Is the Minister aware that the disastrous fall in the number of men employed in Wales over the period of which he speaks is certainly due not to current difficulties but rather to a deep and chronic malaise in the Welsh economy due to misgovernment over a long period of years? Is the hon. Gentleman aware that since the Government in London have been unable to provide work for Welshman in Wales, it is time they yielded government of Wales to the people of Wales?

Mr. Fraser: I do not agree with the hon. Member's premises. Total employment in Wales between 1955 and 1974 increased by 20,000. The diminution in traditional industries is in line with the movement of a similar kind through- out the rest of the United Kingdom and other industrial countries.

Mr. Roy Hughes: Does my hon. Friend agree that investment is the key to future employment prospects in Wales and that in this respect the Industry Bill and the Welsh Development Agency (No. 2) Bill can play a fundamental rôle? Does he agree that private industry has been letting the nation down by failing to invest?

Mr. Fraser: My hon. Friend is quite right. There is under-investment, and both these Bills should bring a great deal of benefit to Wales.

Mr. Wigley: asked the Secretary of State for Employment what is the latest estimate of the number of employees in employment in Wales; and how this compares with the mid-year figure for 1972, 1973 and 1974.

Mr. John Fraser: The latest available employment estimates relate to June

1974, when there were 992,000 employees in employment in Wales compared with 1 million in June 1973 and 973,000 in June 1972.

Mr. Wigley: Is the Minister aware that the drop between 1973 and 1974 is a direct reflection of the number of people who have had to leave Wales to look for work? That is a reflection of the increase in unemployment for men, the figure of which in respect of my constituency stood at 14·7 per cent. this spring. Is he aware that that situation is totally unsatisfactory? Will he give an assurance that the Government, in any economic package which they are now considering, will bring in no measures to worsen the unemployment situation in places such as Wales?

Mr. Fraser: I have already replied that the Government have as an objective of their policy the bringing of employment to Wales. Between 1972 and 1974 there was a growth in the number of jobs in Wales. The Welsh Development Agency, the doubling of the regional employment premium and the making of the whole of Wales an assisted area have helped employment there. That policy will continue.

Unemployed Persons

Mr. Skinner: asked the Secretary of State for Employment if he is satisfied with the current level of unemployment; and if he will make a statement.

Mr. Foot: I am naturally dissatisfied with the current level of unemployment. The figure is already much too high and the danger is that it will rise higher still for several months to come. Partly the trouble arises from the recession which has hit many countries besides our own. Our capacity to overcome the menace will depend on a combination of policies, not least and immediately upon our success in curbing inflation.

Mr. Skinner: Will my right hon. Friend cast his mind back to the days of the Labour Party conference in 1966 when the country was suffering from relatively minor unemployment? Does he recall that he made a glorious speech attacking the possible increased unemployment that might arise from the economic package that was about to be launched at that


time? Will he give a guarantee that he will not tolerate, in any economic package that is presented this afternoon or at any other time, provisions which set out deliberately to make the dole queues even longer?

Mr. Foot: My hon. Friend will recall that my original reply is in exact conformity with what I said at that conference. I have just told him that the present level of unemployment is much too high, and I do not qualify that in any way. One of the purposes of any measures the Government put forward for dealing with the position is to try to curb increasing unemployment and then to bring down the unemployment figures themselves.

Mr. Cormack: Is it not a fact that, whatever the Chancellor says this afternoon or at any other time, unemployment is almost certain to rise in the coming months? Is it not a fact that unless the Chancellor takes firm action there will be the most dreadful rise this country has ever seen? Will the right hon. Gentleman now tell us whether there is to be a statement this afternoon?

Mr. Foot: There is to be a statement this afternoon. I referred in my original reply to the future danger of increasing unemployment. I am not complacent about that matter. The present level of unemployment is much too high. There is a danger of its going higher still, and we have to take a whole series of measures to try to deal with that situation, including measures to deal with inflation.

Mr. Kilroy-Silk: Does my right hon. Friend accept that unemployment on Merseyside is already intolerably high, particularly among school leavers? What kind of selective action do the Government propose to take to alleviate unemployment in the area and to ensure that school leavers, who at present are leaving school with a prospect no better than the dole queue, do not become the future forgotten generation?

Mr. Foot: I fully appreciate the fact that my hon. Friend has raised this question, coming as he does from Merseyside, where the unemployment situation is even worse than in most other parts of the country. Having been in Merseyside myself this weekend I am now even more aware of the strong feelings of my hon.

Friends and others in the area about the situation.
The Government have already tried to assist by making Merseyside a special development area last autumn. They have also taken steps to increase considerably the number of advance factories that are to go to Merseyside. Measures for assisting school leavers, which would also apply to the rest of the country, must be considered further, and the measures concerned with the temporary employment subsidy, on which we shall be making an announcement, will be of further assistance. One of the good signs on Merseyside is what is happening in Liverpool Docks, where the situation has improved considerably. That can make a contribution to improving the general situation on Merseyside.

Mr. Prior: Is the right hon. Gentleman aware that few Opposition Members will disagree with his original answer to the Question? The Opposition castigate the Government and the Minister for their failure to take earlier action to control inflation and their failure to deal at an earlier stage with the problems of school leavers, which will be especially marked in the next few months ahead. Two months ago the House debated that matter. It does not appear to have been followed by Government action.

Mr. Foot: When that matter was debated the Government gave a good answer to that point when the Opposition raised it. We are also seeing what further measures we can take to assist in the situation. As to the hon. Gentleman castigating the Government for what we did in the past, some of the measures taken by the Government last year, which are still having their effect, resulted in keeping our unemployment level below the levels of most other countries in Western Europe. The Opposition bitterly criticised some of those measures when they were taken. But I agree that no one can be complacent about the situation in any part of the country.

Mr. Peter Morrison: asked the Secretary of State for Employment what is the present rate of unemployment as compared with a year ago.

Mr. Pardoe: asked the Secretary of State for Employment what are his


latest estimates for the level of unemployment in the United Kingdom.

Mr. Foot: On 9th June 1975 the rate of unemployment in the United Kingdom was 3·7 per cent. compared with 2·3 per cent. on 10th June 1974.

Mr. Morrison: Does the Secretary of State agree that one man's excessive wage rise is another man's lost job? Will he in future consult the vast majority of trade unionists who would prefer a reasonable wage settlement and secure employment?

Mr. Foot: I agree that excessive wage settlements, as they have sometimes been described, can contribute to the level of unemployment. However, taking the figures over the past year, it would be wrong to say that wage settlements are mainly responsible for unemployment. The main cause of the unemployment throughout the whole of this period has been the recession which has hit the whole Western world.

Mr. Pardoe: Is the right hon. Gentleman aware that the measures which the Government will inevitably introduce will raise the levels of unemployment to much higher figures than those he has stated? Has he considered his personal responsibility for this situation? Does he recognise that unemployment will now be much higher as a result of the delay in bringing forward the tough measures which the economic situation necessitates? How far has he been responsible for those delays?

Mr. Foot: I do not accept any part of what the hon. Gentleman says. Of course I accept the responsibility. As long as I am in this job I must answer for figures, which are of a serious character, such as those I read out in answer to the Question. We should discuss the causes for those figures and deal with them. The hon. Gentleman has spoken as if the sole cause was a particular form of the wages policy. I do not agree with him about that.

Mr. Molloy: Is my right hon. Friend aware of the phenomenon created in the Greater London area when the Conservative Party was in power, when factory undertakings were allowed to be sold and warehouses were allowed take their place, and when no endeavour was made by the Conservative Government to arrest that trend? That has contributed to

unemployment. Will my right hon. Friend discuss with the Secretary of State for the Environment means of stopping the cancer started by the Conservative Government, which has increased unemployment in the Greater London area?

Mr. Foot: There are some measures of that character. I should have thought that hon. Members in all parts of the House, whatever differences of opinion they may have about the different cures for the problem, would agree that the nature of unemployment today is of a different character in many respects from that in years gone by—and especially because of the way in which the huge increase in oil costs has contributed to the unemployment situation in this and in other countries. We have been trying to ward off those difficulties in this country. In some respects we have been more successful than other countries, and in other respects we have not been so successful. But we must use a combination of measures to deal with the situation. The idea that a single panacea can deal with it is mistaken.

Accident Prevention

Mr. David Watkins: asked the Secretary of State for Employment what is being done to raise the general level of awareness of the need for accident prevention at work.

Mr. Harold Walker: The Health and Safety Work etc. Act has established the Health and Safety Commission to plan and arrange the implementation of the wide-ranging powers provided for in the Act. A major part of its effort is already being directed, through the Health and Safety Executive, to raising the level of awareness of the need for accident prevention.

Mr. Watkins: Has my hon. Friend seen the recent TUC statement which points out that on every average working day four people are killed and more than 3,000 are seriously injured at work? Will he therefore seek to ensure that the Health and Safety at Work etc. Act is applied with the maximum emphasis on prevention? I emphasise prevention.

Mr. Walker: My hon. Friend is right to express his concern, as he does on so many occasions, about these appalling


figures. In its short life so far, the Health and Safety Commission has done a tremendous amount in terms of publicising the provisions of the Act and the new obligations that it imposes. The details are much too lengthy for me to refer to now. If, however, my hon. Friend would like me to write to him setting out what has been done, I shall be pleased to do so.

Mr. Wells: Will the Minister look at the need to educate people rather than to legislate? There is far too little awareness by the man on the shop floor and on the farm. Legislation is only restrictive. What is needed is education to obey rules.

Mr. Walker: I am second to none in urging the need for wider education in these matters, wider understanding, the provision of courses and publicity. It is perhaps the over-dependence on those aspects and inadequate and unsuitable statutory arrangements which have contributed to the appalling figures to which my hon. Friend the Member for Consett (Mr. Watkins) referred. It seems odd that we should be strictured by a member of the Conservative Party, which last year deprived agricultural workers of the full protection of the new statutory provisions. We shall put the situation right in a short time with the provisions of the Employment Protection Bill.

Mr. Cryer: Does my right hon. Friend agree that one of the ways of raising awareness is to encourage the trade union safety committees to act? Will he bring pressure on the Health and Safety Commission, which has been dilatory about this matter, to issue regulations so that trade unions and employers know where they stand? We should encourage these committees to get cracking so that the appalling level of industrial injuries can be reduced.

Mr. Walker: I agree with my hon. Friend about the importance of the workers' safety representatives and the proposed statutory safety committees and the contribution they can make to an increased awareness and a diminution in the toll of industrial accidents. I share his hope that the commission will make speedy progress during the drafting of the regulations and that in doing so it will have full regard to the Government's

declared policy and the provisions embodied in the Employment Protection Bill, which by deleting one part of the provisions of the Health and Safety at Work etc. Act in this matter should make its task easier. Therefore, I hope that it will respond to the appeal which has been addressed to it from the House, in which I share.

Mr. Farr: Is the Minister aware that while the accident rate in some industries has improved, in agriculture just the opposite has taken place? Is he aware that the rate of fatal accidents per thousand employed in agriculture today is higher than it has been since the war? Will he do something about this?

Mr. Walker: I fully appreciate that the total of accidents in agriculture has grown heavier. This makes it all the more incomprehensible that the hon. Gentleman and his right hon. and hon. Friends last year should have deliberately deprived agricultural workers of the safeguards. I hope that, in the light of what he said, when the Employment Protection Bill reaches its Report stage he will fully support us in extending the provisions of the Health and Safety at Work etc. Act to safeguard the agricultural workers in his constituency.

Earnings

Mr. MacGregor: asked the Secretary of State for Employment what is the latest annual percentage increase in average earnings.

The Minister of State, Department of Employment (Mr. Albert Booth): The April index shows an overall increase in average earnings on a year earlier of 30·5 per cent. for the industries covered.

Mr. MacGregor: Is the Minister aware that it is figures like this that are causing concern among informed observers abroad, who can see clearly that they are way out of line with productivity at home and with international increases in pay levels, and that it is this most of all that is causing the extremely disturbing lack of confidence in sterling at the present time? Will he therefore state clearly what level of wage increase is compatible with the Government's target—modest enough—of getting inflation down to 10 per cent. by 1976?

Mr. Booth: The social contract guidelines for wages were based upon an economic judgment made at that time. It has proved in practice that the movement towards obtaining the low paid target, equal pay, meeting obligations under threshold agreements and dealing with a number of very serious problems that arose as a result of the statutory pay policy which preceded it are measures which have led to an increase above what was judged necessary at that time.
I think it would be better if, instead of my attempting to predict a figure which is appropriate to the judgment of the present economic circumstances, I said that whatever guidelines are agreed for the second round need to be much more closely adhered to in the circumstances that exist now than was possible in those which existed when we came out of statutory wage control.

Mr. William Hamilton: Will my right hon. Friend give an assurance that, whatever else might happen, there will be no retardation of the progress made towards equal pay between now and the end of the year?

Mr. Booth: I think I can say, on behalf of all Ministers in my Department, that we have persistently taken the view that, whatever policies are followed, equal pay must have the utmost priority.

Mr. Hayhoe: But how long must it be before the Government realise that it is the social contract and its so-called guidelines which have led us into our present disastrous situation? Is not it a fact that the wage settlements to which the Secretary of State referred, when he said that other people were calling them excessive, are the very ones the Secretary of State has described as being within the social contract?

Mr. Booth: The factors which have put the social contract guidelines to the test were created by the policy that preceded it. It cannot be deduced from these circumstances that the guidelines created the problem.

European Community Membership Effects

Mr. Gow: asked the Secretary of State for Employment what is his estimate of the number of jobs which will be

lost in the United Kingdom during the current year as a result of the United Kingdom's membership of the EEC.

Mr. John Fraser: My Department has made no such estimate.

Mr. Gow: Why not?

Mr. Fraser: Because I do not think that anything useful would be served by it.

Scotland

Mr. Crawford: asked the Secretary of State for Employment what is the current rate of unemployment in Scotland.

Mr. John Fraser: On 9th June the rate of unemployment in Scotland was 4·7 per cent.

Mr. Crawford: Will the Minister note that the people of Scotland are not very interested in the fact that the unemployment gap between Scotland and one of the most bankrupt economies in Western Europe—England—is narrowing? Will he also note that Scotland's economy is jeopardised by its association with the crisis-ridden English economy and that the only way in which security of employment can be obtained in Scotland is by means of Scottish self-government?

Mr. Fraser: No, I do not agree with the premise. I think it is encouraging that whereas some time ago the unemployment level was two-thirds higher in Scotland than in Great Britain as a whole, it is now only about one-quarter higher. I think that the link with the rest of the United Kingdom brings considerable benefit.

Mr. Alexander Wilson: Is my hon. Friend aware that we are all concerned in Scotland at an unemployment figure of 180,000 and that we are nearly entirely dependent on American and English companies to supply the Scottish people with jobs? Is he also aware of the sheer apathy of the Scottish industrialists in believing and investing in industry in Scotland? [An HON. MEMBER: "Servile."] It is the truth. Will my hon. Friend take those facts into cognisance and look at the figures over the years, and try to inject some British pride into the Scottish industrialists on behalf of the Scottish people?

Mr. Fraser: A good deal of investment in Scotland has come from abroad. The Government recognise the need for further investment to provide jobs. This is why we are putting through Parliament an Industry Bill and a Scottish Development Agency Bill to bring that kind of investment to that part of the United Kingdom.

Mr. Henderson: Is the Minister aware that the man who is unemployed in Scotland fails to see why Scottish oil should be removed from Scottish oilfields and brought here to London without any benefit to the people in Scotland?

Mr. Fraser: I think the hon. Gentleman would agree that the investment required to bring oil ashore has come not just from the United Kingdom but from other parts of the world as well, and that there is benefit in co-operation between us.

Mr. Canavan: Will my hon. Friend remind SNP Members and their friends in the CBI and Aims of Industry that the current level of unemployment in Scotland, or anywhere else in Britain, would not be nearly so bad if employers in the private sector could be encouraged to invest a bit more in providing jobs particularly for young school leavers, instead of spending millions of pounds on silly, irresponsible advertisements like the special supplement in the Scotsman today advertising the ridiculous farce called Free Enterprise Day which they are celebrating today?

Mr. Fraser: I endorse the view that investment is one of the prime needs, and I have also emphasised the steps being taken by the Government to bring investment to Scotland.

Manpower Services Commission

Mr. Duffy: asked the Secretary of State for Employment when he expects the decision to be made on the locality of the Manpower Services Commission.

Mr. Harold Walker: We expect to be able to make an announcement about the location of the Manpower Services Commission shortly.

Mr. Duffy: Is the Minister aware that the Hardman Report has nothing in it for Yorkshire, that no part of the country

is more in need of the kind of employment that the Hardman Report was concerned to disperse than South Yorkshire and that his hon. Friends in that area are confident that he and his right hon. Friend will continue to put the strong claims of Sheffield and district before those who will take this decision?

Mr. Walker: The whole House will recognise the persistence with which we have pursued this matter on behalf of my hon. Friend's constituency, and I hope that when the decision is made those responsible will take full heed of the remarks of my hon. Friend.

Mr. Stokes: Will the Minister consider whether this large Manpower Services Commission is now justified in view of present economic conditions? Will he also say what is its total cost? Does he agree that the people concerned would be better employed in manufacturing industry?

Mr. Walker: It was the decision of the Conservative Government, endorsed by Parliament, that created the Manpower Services Commission and also set up the Hardman Committee which recommended its dispersal.

Pay Settlements

Mr. Biffen: asked the Secretary of State for Employment if he will make a statement on the current pattern of wage and salary settlements; and what representations he has received advocating their statutory control.

Mr. Foot: We have made it clear that the general level of settlements is too high and must be substantially reduced. I have received no representations advocating statutory control from any representative body.

Mr. Biffen: In view of the right hon. Gentleman's long-standing and honourable record of inveterate opposition to the statutory control of salaries and incomes, may we assume that he would regard any measure of statutory control of incomes as a resigning issue?

Mr. Foot: I am grateful to the hon. Gentleman for having followed my career so carefully for so long a period. I hope that he will be able to follow it in the future with the same acclaim and approval.

Mr. Heffer: Can my right hon. Friend give us his view of precisely what is an excessive wage claim or an excessive settlement, as many Government supporters believe that a lot of wage settlements have not been excessive at all? Secondly, in giving us an assurance that there will not be a statutory incomes policy, can my right hon. Friend also indicate that the Government will not fall into the trap of an "either/or" situation—either a statutory incomes policy or excessive unemployment? Cannot he indicate that the time has come for alternative economic policies along the lines indicated by my hon. Friend in a statement last week?

Mr. Foot: Certainly I want to do everything possible to avoid both an increase in unemployment and the imposition of any statutory system for the control of wages. I believe that one of the best ways of helping to ensure that neither of those perils occurs and that neither of those dangers develops is by ensuring that we carry out the kind of proposals contained in the guidelines under the social contract and the kind of proposals that the TUC has been discussing with the Government for implementation over the coming period.
I agree that there may be much dispute about what is excessive. What I meant by excessive settlements is what was described as "excessive" in the guidelines of the TUC themselves.

Mr. Prior: If the target of the Chancellor of the Exchequer for a reduction to 10 per cent. in the rate of inflation is to be reached by the end of next year, what estimate and target figure have the Government set themselves for average increases in wages during the coming year?

Mr. Foot: The right hon. Gentleman must wait and listen to the Chancellor of the Exchequer. The Chancellor of the Exchequer is of age. He can speak for himself, and I am sure that he will reply to the right hon. Gentleman.

Mr. Prior: But the Secretary of State is Secretary of State for Employment. These are questions which come within his Department, and they are for him to deal with. Why is he so shy about answering? He is not generally shy.

Mr. Foot: I can assure the right hon. Gentleman that I am not shy. It seems much more sensible and orderly that, since the Chancellor of the Exchequer is to make a statetment on that precise subject, the right hon. Gentleman should restrain himself for just a few minutes more.

Industrial Democracy

Mr. Rooker: asked the Secretary of State for Employment if he will make a statement on Government plans in connection with industrial democracy.

Mr. Foot: I hope to do so shortly.

Mr. Rooker: Will my right hon. Friend take on board, and get his colleagues to do the same, the fact that there is likely to be a complete block on any worker involvement in advancing manufacturing technology until this policy comes into operation?

Mr. Foot: I agree with my hon. Friend and the view which he and others have expressed in the discussions which have taken place in the House on this subject. This is one way in which we can make the most important developments over the next few years. I hope that the statement on this subject which is to be made very shortly will advance the situation. We want to advance it speedily. Whether it will be as fast as my hon. Friend would wish is another matter.

Oral Answers to Questions — CHANCELLOR OF THE EXCHEQUER (BROADCAST)

Mr. Tebbit: asked the Prime Minister if the broadcast made by the Chancellor of the Exchequer on Radio Leeds on the economy on 14th June represents Government policy.

Mr. Norman Lamont: asked the Prime Minister whether the broadcast of the Chancellor of the Exchequer on the economy on Radio Leeds on 14th June represents Government policy.

The Prime Minister (Mr. Harold Wilson): Yes, Sir.

Mr. Tebbit: Will the Prime Minister tell us whether we can expect the bold words of the Chancellor of the Exchequer in that broadcast to be followed by bold


action this afternoon, or will the Government continue their cringing abdication of duty to Jack Jones and wait for him to dictate the policy of the present Government when the country is in deep trouble?

The Prime Minister: Although I do not accept at all any of the words used by the hon. Gentleman, I recommend him to await the statement by my right hon. Friend the Chancellor of the Exchequer at the end of Questions.

Mr. Kilroy-Silk: Is my right hon. Friend aware that the sudden interest of the Leader of the Opposition in the state of the economy coincides with the broadcasting of these proceedings and that, if nothing else, radio has at least flushed her out from her shy retirement? When these proceedings stop being broadcast, she will no doubt go back to her top priority of the Jimmy Young Show.

The Prime Minister: No, Sir, I do not accept at all what my hon. Friend said, and I did not entirely like one of his phrases about the right hon. Lady. But I think that the problem here is not any lack of interest in these matters. It is a total inability to produce any Opposition policy on them.

Mr. David Price: On a point of order, Mr. Speaker. The Prime Minister referred to a statement being made by the Chancellor of the Exchequer. There is no notice put up in the Members' Lobby to the effect that the Chancellor of the Exchequer is making a statement.

Mr. Speaker: That is not really a point of order arising out of Questions.

Oral Answers to Questions — MIDDLESBROUGH

Mr. Wrigglesworth: asked the Prime Minister if he will make an official visit to Middlesbrough.

The Prime Minister: I have at present no plans to do so, Sir.

Mr. Wrigglesworth: Is my right hon. Friend aware that if he had visited Middlesbrough he would have found amongst my constituents considerable confusion about the Opposition's economic policy? Will he therefore consider appointing a Select Committee to investigate which alternatives they propose, and will he consider including on that Com-

mittee the right hon. Member for Worcester (Mr. Walker) and the right hon. Member for Leeds, North-East (Sir K. Joseph)?

The Prime Minister: Since the confusion referred to by my hon. Friend is not confined to Middlesbrough, I do not see why I should make special arrangements to visit Middlesbrough to hear about it.

Mr. Brittan: Will the Prime Minister accept that if he travelled only eight miles from Midldesbrough he would find a wide understanding of the Opposition's policy —the recognition that what is needed is firm action to cut public expenditure and to deal with inflation and, above all, an understanding that the present Government have failed the nation totally?

The Prime Minister: I am grateful to the hon. Gentleman. I am not sure whether he was proposing that the eight miles should be in a landward or a seaward direction. Whichever it is, it he or anyone within eight miles of Middlesbrough has this valuable information he owes it to the nation and to the Leader of the Opposition to make clear to the nation what the Opposition's policy is.

Mr. Arthur Bottomley: Is my right hon. Friend aware that the people of Middlesbrough recall with affection his last visit and would like to see him again? Does he not think that the time is opportune for him to come to Middlesbrough and the North-East to see what is being done in that area to help the North Sea development, which will do so much to help our economy?

The Prime Minister: I am grateful to my right hon. Friend. I well remember the visit, which, I hope, played a small part in the winning of a seat for Labour in Middlesbrough at that time. Certainly my right hon. Friend is right to draw my attention and that of the House to the work that is being done in relation to the North Sea. Apparently 400 companies in the Northern Region, including Middlesbrough, are doing, or intend to do, North Sea oil work. Twelve of them are currently engaged on large-value North Sea contracts Northern industry has between 15 per cent. and 20 per cent. of the British share of the North Sea hardware market. and the estimated value of work so far undertaken is £200 million,


which represents 5,000 jobs. [Interruption.] This is important to the people of Middlesbrough. The number of jobs directly attributable to North Sea offshore work in the region is about 5.000, with a further 3,000 estimated over the next two years.

Oral Answers to Questions — PRIME MINISTE (OFFICIAL ENGAGEMENTS)

Mr. Golding: asked the Prime Minister if he will list his official engagements for 1st July.

The Prime Minister: I chaired a meeting of the Cabinet this morning and I shall be having further meetings with my colleagues and others this afternoon. Later today I hope to have an audience of Her Majesty the Queen. This evening, I expect to be in my place in this House and if, as I expect, I am convinced by the arguments, I shall be casting my vote, or votes, in the proceedings on the Industry Bill.

Mr. Golding: Is the Prime Minister aware that many of us will wish him well? In view of the many matters of common concern between the two countries, will he tell us whether he has any intention of having further discussions with the Prime Minister of Belgium while that gentleman is in Britain?

The Prime Minister: I spent several hours with the Prime Minister of Belgium last night. We discussed bilateral matters and the situation in the European Economic Community following the outcome of the referendum. As the House knows, Mr. Tindemans has been charged by various Heads of Government to visit all the areas of the Community and to meet not only Governments and political parties but other interested persons and groups to discuss the future development of the Community. We spent some time discussing these matters last night. He is welcome and he will now visit Scotland and Wales. The success of his visit is assured.

Mr. Maxwell-Hyslop: Will the Prime Minister now do his public duty at his audience of Her Majesty by advising her that he does not have the confidence of the country, of the House or of anyone abroad? That is public knowledge.

The Prime Minister: No, Sir. I am never guilty of misinforming the Queen about the true facts.

Mr. Thorpe: Did the Prime Minister assure Mr. Tindemans of the enthusiasm of this country for direct elections to the European Parliament? Was the Prime Minister successful in explaining to Mr. Tindemans the mysteries of our existing electoral system, which I find difficult?

The Prime Minister: Mr. Tindemans did not express any interest in our electoral system in any shape or form. I have no doubt that the right hon. Gentleman will see Mr. Tindemans for discussions on these matters and will express views on this subject to him if he thinks them of interest. We did not express any view on the question of direct elections. As the right hon. Gentleman and the House know, the Parliamentary Labour Party has decided to nominate Members, with the agreement of the House, to go to the Assembly. No doubt those Members will have their eyes and ears open and consider these matters. [Interruption.] As I made clear a week ago, the matter of Lord George-Brown is not one for the Prime Minister or the leader of the party. The procedure has already been settled and will be carried out by the Parliamentary Labour Party, the Chief Whip and the chairman of the liaison committee. In no way did anyone interfere with the selection or other wise of Lord George-Brown.

Oral Answers to Questions — TUC AND CBI (MEETING)

Mr. Molloy: asked the Prime Minister if he will make a statement on his most recent discussions with the TUC and the CBI.

The Prime Minister: I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 24th June.

Mr. Molloy: Will the Prime Minister take careful note of the TUC's six points? Will he reject the monetary solution proffered by some parts of the Conservative Party though not by others, and consider the position of the Leader of the Opposition, who does not know whether she wants it or not?

The Prime Minister: Last week I expressed a welcome in the House, which I am sure is shared by all hon. Members, for the six points put forward by the TUC. It is a very constructive approach to these matters. I have no doubt that after my right hon. Friend the Chancellor of the Exchequer has made his statement, some of these matters will be taken up. I do not think that either the views of the official Opposition or of the "provisionals" below the Gangway are of any interest whatever to the House.

Mr. Lawson: In view of the Prime Minister's constant crowing about our export performance, why is the pound doing so badly? Is there some problem about confidence in the Government?

The Prime Minister: There is no doubt that over the first five months of this year we have reduced the balance of payments deficit to one-quarter of what it was—a 75 per cent. reduction. I have no doubt that some people are daft enough to listen to the hon. Gentleman and to people who talk like him.

Mr. David Steel: In view of the experience of the previous Labour Government in 1966 when there was a concordat called the Declaration of Intent, which involved the TUC and the CBI, will the Prime Minister take note of the TUC's views with interest but remain in charge of the Government of this country?

The Prime Minister: Yes, I fully accept that. Indeed, I have made clear, as my right hon. Friend the Chancellor will—I said this yesterday, when I opened the Royal Show, and on several previous occasions—that the Government will not hesitate to discharge their responsibility. They have the right and the duty to do so in all these matters affecting inflation. The fact that we receive no advice whatever from Opposition parties will not stand in the way of the Government discharging their duty in these matters. We are trying to proceed by consent, which was one of the high failures of the previous Conservative Government.

Mr. Gordon Wilson: At the conclusion of the right hon. Gentleman's present discussions with the TUC and the CBI, will he initiate discussions with the STUC and the Scottish Council (Development and

Industry) about their wishes to have economic powers for the Scottish Assembly?

The Prime Minister: The hon. Gentleman will be aware that earlier this year, with a number of my right hon. Friends —it was the first time that this had ever been done by any Prime Minister—I had very long and serious discussions with the STUC. [Interruption.] If anyone wants to claim that he did, he may do so. During those meetings, for the second time this year I also had meetings with representatives of the Scottish Council. Matters relating to the Scottish Development Agency were fully debated in the House last week and the House took a decision on them.

Mr. Ron Thomas: I should like to refer to the matter of exports and sterling. Will my right hon. Friend be good enough to comment on the reports which indicate that the lack of intervention by the Bank of England, or the limited extent of that intervention, and the fall in the value of sterling are part of the Government's overall strategy?

The Prime Minister: These are very technical matters on which hon. Members may have sharply differing views. I do not want in any way to anticipate the statement of my right hon. Friend the Chancellor of the Exchequer.

Mrs. Thatcher: The Prime Minister said again this afternoon that one reason for his delay in taking action was that he wished to proceed by way of consent. Has he now obtained the consent of the TUC and the CBI?

The Prime Minister: I have made clear —and when the right hon. Lady hears my right hon. Friend's statement she will hear—that we are in continuing discussion with the TUC and the CBI. A great deal of progress has been made, but in our view that progress has not yet gone far enough. We believe that it is right for my right hon. Friend to set out the position this afternoon. I am certainly not going to be told by the right hon. Lady, who is not notable for consulting the TUC, or by anybody else at what point we seek to consult and at what point we are supposed to go in for the policies of confrontation which she advocated when she was in government.

DOMESTIC INFLATION

The Chancellor of the Exchequer (Mr. Denis Healey): With permission, Mr. Speaker, I wish to make a statement.
The Government have been engaged in discussions with the TUC and the CBI about measures to achieve a drastic reduction in the rate of domestic inflation. For millions of our fellow citizens, particularly housewives and pensioners, this is the overriding priority. It is a pre-condition for reducing unemployment and increasing investment. Although these discussions are not yet concluded, I believe that it is necessary for the Government to state their intentions now.
We are determined to bring the rate of domestic inflation down to 10 per cent. by the end of the next pay round and to single figures by the end of 1976. This means the increase in wages and salaries during the next pay round cannot exceed 10 per cent. The same limit is being set for dividends.
The Government have already reached an advanced stage in preparing measures which are fair and just. These measures will ensure that all sections of the community share the burden fairly. They will set out how the 10 per cent. limit for settlements should be expressed: for example as a percentage or flat rate or some mixture of the two. They will describe how the Government can satisfy the public that the limits are being observed. They will also cover action to check the rate of price increases as the rate of pay inflation slows. In addition, they will deal with the central problem of compliance, since it is no good having an agreed limit for pay increases unless we can be certain it will not be exceeded. In particular, we must be able to satisfy those who settle early in the round that they will not be left behind by later settlements at an excessive level. I know that the TUC attaches special importance to this.
The Government will use a battery of weapons for this purpose. For example, we propose to fix cash limits for wage bills in the public sector so that all concerned may understand that the Government are not prepared to foot the bill for excessive settlements through sub-

sidies or borrowing or by loading excess Costs on the public through increases in prices and charges. We shall take action through the Price Code to encourage compliance by private employers.
I propose to employ the system of cash limits more generally as a means of controlling public expenditure in the short term.
My Government—[Interruption.]—are already consulting the CBI and the TUC about the proposals. [Laughter.] I doubt whether hon. Members are doing themselves or the House very much credit by the levity with which they approach this problem, The Government welcome the efforts which the TUC has already made to arrive at a plan for lower pay increases in the next round. We should much prefer to proceed on the basis of a voluntary policy agreed with the CBI and the TUC. But a voluntary policy will not be accept-able to the Government unless it satisfies the targets they have set for reducing inflation and includes convincing arrangements for ensuring compliance. If, however, no agreement can be reached which meets these conditions, the Government will be obliged to legislate to impose a legal requirement on both public and private sector employers to comply with the 10 per cent. limit. The Government will announce their decisions in a White Paper to be published before the end of next week.

Sir G. Howe: Will the Chancellor accept that the whole House will welcome the fact that the Government have at last begun to grapple with the nation's economic problem? Hon. and right hon. Members will welcome the extent to which the Government have accepted many of the policies which we have been urging upon them for months, in particular, the use of cash limits as an effective control on public sector wages.
Will the Chancellor accept that we are concerned at the possible implications of using price control in the private sector to the survival of profitable companies and so to the continuance of jobs and employment and that we are gravely disquieted by the absence from the statement of any reference to two vital matters—the abandonment of any further plans for nationalisation and reductions in public spending.
Finally, will the Chancellor acknowledge that the fact that he has been obliged to make this statement today is a confession of the total failure of the last 16 months of profligacy, dissension and incompetence?

Mr. Healey: I am grateful at least for the welcome which the right hon. and learned Gentleman gave to my announcement. He also welcomed the fact that, as he claimed, I have adopted some of his policies. The Opposition Front Bench has put forward so many policies within the last few weeks that it would be impossible for me to avoid adopting some of them.
When the right hon. and learned Gentleman asks why I did not introduce cash limits before, I might well put the same question to him and his colleagues. They were in office for three-and-a-half years up to last February but made no attempt whatever to deal with this problem. We are doing so now, and I am glad to see that we have the Opposition's support in introducing this innovation into the control of our public expenditure.
On the question of using the Price Code as a sanction against excessive settlements in the private sector, I must put this point again to the right hon. and learned Gentleman. I recognise that the Price Code has been bearing heavily on many companies. It will not bear more heavily under the proposals I put forward, except on companies which make settlements in excess of a level which I hope the right hon. and learned Gentleman will endorse. I hope that he will agree that action along these lines is a necessary supplement to any policy for bringing down the rate of inflation.
The right hon. and learned Gentleman cannot conceivably argue that there is any way of bringing down the rate of inflation quickly—and I hope he will agree that that must be our common objective, wherever we sit in the House —except through direct action on the level of wage settlements. It is ridiculous to imagine that changes in the Government's policy for nationalisation or cuts in public expenditure will have the slightest effect, even on the theory held by the monetarists, within the time scale in which it is essential for the country to produce results.

Mr. Heffer: Will my right hon. Friend accept that certain aspects of his statement will not be widely welcomed by Government supporters? It is a clear indication that the Government are steadily moving towards a statutory incomes policy, which is contrary to our election pledges. Is my right hon. Friend aware that for some considerable time an alternative economic strategy has been advocated by some of his hon. Friends, a strategy which should be adopted to avoid a statutory incomes policy and to deal with the serious crisis without resortting to the type of measures which my right hon. Friend is resorting to today?

Mr. Healey: I remind my hon. Friend that all of us on this side of the House fought the last election on a manifesto which pledged us to treat the reduction of inflation as our first and overriding priority. [HON. MEMBERS: "Yes, 8·4 per cent."] I ask my hon. Friend to recognise the truth of the statement repeatedly made by leaders of the trade union movement in recent weeks that it is not possible to bring down the rate of inflation, as we undertook to do, without achieving a substantially lower level of payment settlements in the next pay round than in the last.
What I have sought to do in my statement today is to point out to both sides of industry that we would prefer to achieve this objective by voluntary means. But achieve it we will, and I believe that the whole country will recognise that as our duty. I hope that we shall have overwhelming support from the people of this country when we carry out that duty.

Mr. Pardoe: Is the right hon. Gentleman aware that he will have the full support of my right hon. and hon. Friends and myself in his defence of the national interest against his colleagues, whether in the Cabinet or outside it? Does he recognise that to reduce pay increases to the level of 10 per cent. will involve a substantial decrease in the standard of living of all of us in this country? Will he say how much that decrease will be, and will he now accept that it is absolutely impossible to bring about that decrease by voluntary means? Will he admit that what he said this afternoon amounts to an acceptance of the position that my colleagues and I have argued consistently over 10 years or more, that


this country must have a statutory incomes policy or fail?

Mr. Healey: I suppose I must welcome the offer of support by the hon. Gentleman, although I am not sure that I shall find it wholly adequate for the purposes that I intend to carry out.
The spread of the reduction of living standards which would be implied by a limit of 10 per cent. on pay increases over the coming year would depend on whether it was achieved by percentage increases all round or by a flat-rate cash increase. In the latter case, the real take-home pay—corrected for inflation, and after the deduction of tax and insurance and superannuation contributions—would rise for people on two-thirds' average earnings, would fall by about 2½ per cent. over the year as a whole for people on average earnings, and would fall by substantially more for people with above-average earnings. A percentage increase would spread the burden more equally, and to that extent the person with low average earnings would not gain but would stay in roughly the same position.
The reduction required is nothing like as great as I have seen it stated in some newspapers. It would be temporary. I believe that there will be overwhelming public support for seeking to curb this very damaging inflation by sacrifices now, rather than to remain on an inflationary merry-go-round which will ultimately destroy the whole of our society.

Mr. Jay: Although we must look carefully at the details of my right hon. Friend's White Paper, in my opinion he is absolutely right to take resolute action now. Will the House have an opportunity to debate the White Paper and my right hon. Friend's statement as soon as the White Paper is published?

Mr. Healey: Yes, Sir, of course. I can give that assurance.

Mr. Ridley: Can the right hon. Gentleman say why he thinks that these policies, whether voluntary or statutory, which have been tried by successive Governments over the past 10 years and have failed, can possibly succeed now, when all know that the true cause of our present inflation is the gross extravagance of the Government?

Mr. Healey: I know that the hon. Gentleman shares my view—he has ex-

pressed it more than once, and so have many of his hon. Friends—that the root cause of our current inflation is the fiscal profligacy of the Government of which he was once a member. But I do not believe that the hon. Gentleman is realistic. I recommend the hon. Gentleman, who I know poses as a monetarist in these matters, to read a recent pamphlet by the guru of monetarism, Professor Milton Friedman, and his British acolyte, Professor Laidler, who pointed out that there was no possibility of achieving a reduction in the rate of inflation in a period acceptable to the people of this country by the methods which he espouses.

Mr. Wigley: Is the Chancellor aware that there is a grave discrepancy in income levels between Central London and other areas such as Wales, Scotland and the North-East of England? Therefore, will he give serious consideration to producing a policy, if he must, of statutory control or of other control mechanisms which allows for an increase above the average in areas where the level of incomes is much subdued at present?

Mr. Healey: I take the hon. Gentleman's point very seriously. The easiest way of securing a differential advantage for those in areas of below-average wages would be to adopt a form of limit based on a cash sum rather than a percentage.

Mr. Bidwell: Does my right hon. Friend agree that part of the British malady is not simply the rate of inflation but the rate of investment? What effect are these measures likely to have upon that'?

Mr. Healey: I am glad to be able to assure my hon. Friend that investment is certain to increase if the rate of inflation can be brought down at the rate that I have just indicated. It is difficult to conceive of any means by which investment in the private sector can be increased without a similar fall in the rate of inflation.

Mr. Tapsell: Is the right hon. Gentleman aware that the measures that he has announced this afternoon, welcome as they are, will go even further towards reassuring international opinion if he can tell the House that before we rise for the Summer Recess he will be announcing a programme of immediate public


expenditure cuts and introducing legislation to give him the reserve powers to keep wages to a maximum rise of 10 per cent. in case this should be needed during the summer?

Mr. Healey: I think that I made it clear that the Government will have to make up their mind in the next week whether they can place reliance for maintaining an adequate level of wage settlements over the next 12 months on a purely voluntary policy. If they decide that they cannot, they will introduce a necessary legal framework for the policy, probably involving some use of reserve powers, as the hon. Gentleman has just suggested.
On the question of public expenditure cuts, I must point out that the problem in this country today is not excess demand. It is not pressure on capacity. We have a large number of unemployed, and our factories are working below capacity. To increase unemployment by cutting public expenditure could in no sense help in that regard. That is well understood abroad. If we went further and took the advice of the Opposition Front Bench to cut public expenditure, and cut taxes at the same time, that would, by definition, leave the public sector borrowing requirement unchanged.

Mr. Powell: Is not the right hon. Gentleman aware—his reply to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) suggests that he is—that increases in wages and prices are the symptom and not the cause of inflation, and that, therefore, all policies, whether voluntary or statutory, which are designed directly to restrain the increase in prices and wages are futile and irrelevant?

Mr. Healey: The right hon. Gentleman is well known in the House and the country for the absoluteness of his opinions and his belief that there is always only one simple answer to every problem. Let me tell him that the experience of Governments all over the world is that an adequate attack on inflation requires a mix of policies—adequate control of the money supply; in some cases direct action on prices; in other cases direct action on wages. The search for one simple solution to our problems

would lead the country into the same isolation as the right hon. Gentleman experiences in occupying that bench.

Mr. Mackintosh: Those of us who represent the lower paid and the people who suffer by inflation welcome my right hon. Friend's statement. However, does he agree that the greatest danger to the future of Britain is that we produce a package deal in the next few weeks which permits a dribble downhill—by exception, by anti-social hours, by special cases of one form of another—which allows the present erosion by inflation to continue? I welcome my right hon. Friend's statement, but will he say that if there are signs that the level that he has set is being broken he will take positive action, if necessary backed by law? I believe that if he does that he will have the support of the whole country.

Mr. Healey: I am afraid that my hon. Friend does not seem to have listened very carefully to what I have said. I made it clear that unless the Government can satisfy themselves over the coming week that they can achieve a satisfactory voluntary policy which will guarantee a level of settlements over the year of no more than 10 per cent., they will not hesitate to take whatever legal action is required to impose an obligation on employers in both the public and the private sectors to comply with the limit which they have set.
On the question of allowing a policy to be eroded and diffused by exceptions, I recognise that there is a good deal in what my hon. Friend said. But the House and country must recognise that over the course of the last year the overwhelming majority of anomalies which might justify exceptional treatment have already been met by exceptional increases.

Mr. Maurice Macmillan: The Chancellor has referred to investment in industry. Will he accept that the problem is not so much the shortage of finance for investment as the lack of will, which, in turn, is largely due to the unprofitability of the private sector? Will he assure the House now that the measures he will be producing will take full account of this and recognise the need to maintain the corporate sector at a profitable level in order to ensure incentive for investment and development?

Mr. Healey: Of course I recognise—I have said this many times in the House and outside it—that the rate of return expected on capital is the key to investment, whether in the public or the private sector. But what makes the problem much more difficult at present is that it is literally impossible even to calculate a rate of return with inflation running at current rates. But I certainly accept the sense of the right hon. Gentleman's question. That is why I think that some caution is needed in the application of the Price Code to ensure that firms are not sent bankrupt, with people being thrown out of work, by too stringent an application.

Mr. Crawford: Will the right hon. Gentleman give an assurance to the people of Scotland that they will not be made subject to any statutory control of wages and that the considerable differential in earnings—I say "earnings" and not wage levels—between Scotland and England will be levelled out? Does he agree that his statement will give added impetus to the self-government movement in Scotland, especially when the people there see that the best way of breaking through to prosperity is to pursue economic policies based on their own natural resources and their economic development?

Mr. Healey: As I think the hon. Gentleman knows, I cannot agree with the latter part of his remarks. As I pointed out when I had the honour of visiting one of the greatest Scottish cities the other day, in fact Scotland benefits very substantially from union with England in the United Kingdom, for reasons which I shall not repeat for fear of wearying the hon. Gentleman. But I also noted during my visit to Scotland that no part of the United Kingdom is suffering worse from the impact of inflation. I would hope that we would have the same support from the people of Scotland as from the people of England and Wales for adequate action to bring down inflation.

Mr. Atkinson: Does not the Chancellor accept that by spelling out minimum voluntary conditions he has now announced the introduction of compulsory wage control? Does he further accept that this policy, as outlined, will represent a severe cut in wages while at the same

time allowing a rise in unemployment, and will be totally unacceptable to both the TUC and the annual conference of the Labour Party? Does he further accept that the policy now spelt out will be looked upon as a defiance of the manifesto upon which we contested the last General Election? Will he not further accept that the figures he has now given—that inflation is to be cut from its present level of 25 per cent. or 26 per cent. to 8 per cent. by the end of 1976—must of necessity mean a reduction of about 6 per cent. to 7 per cent. in real living standards during the coming year, and that a cut of such brutality will be totally unacceptable to the trade union movement?

Mr. Healey: No one is more conscious than the trade union movement—I have had continuous contact with its representatives at every level in recent months—of the damage which inflation at current rates is doing to the living standards of working people and, even more, to the hope of a happy retirement for working people, who see the value of their pension funds, particularly trade union funds, being destroyed by wage inflation at its current levels. I hope that I can rely on my hon. Friend to join me and the TUC in seeking to fulfil the pledge that we made in our manifesto to bring the rate of inflation down.
My hon. Friend raised the question of unemployment. Let me tell him that the Government—I have said this to him many times and I do not believe that he really disagrees with me—are paralysed —[Hon. Members: "Oh."]—and prevented from taking action to bring unemployment down so long as—[Interruption.] Now that we appear on the radio I think that the country will appreciate the schoolboy humour with which Opposition Members attempt to escape from the labours of trying to understand a serious problem. It is not possible for this or any Government to take measures to bring unemployment down so long as inflation is running at current rates. The only way to put the country in a position to get back to full employment is to bring the rate of inflation down.

Mr. Alexander Fletcher: Does the Chancellor realise that after 16 wasted months we are back in almost precisely the same position as we were during February


1974? [Interruption.] With regard to the Chancellor's 10 per cent. limit on wage awards in the private sector, will he tell the House what action he will take if, for example, the National Union of Mineworkers puts in a claim which is 300 per cent., 400 per cent. or 500 per cent. above the limit he is trying to impose on the private sector?

Mr. Healey: If I may say so, the hon. Gentleman has passed a suitable judgment on the record of his own Government when in power. I do not accept it as a description of the record of the present Government.

Mr. Duffy: Important though consultations, consent and voluntarism are to enable my right hon. Friend to adopt his correctives—and no one on this side of the House would prefer any other policies and none of my hon. Friends can say that we have not persevered with them—is it not clear, in view of recent events, that a vital condition of stability now is an unshakeable and immutable commitment by the Government sharply to reduce inflation? If my right hon. Friend shows the necessary resolution and will between now and the end of 1976, the bulk of the population, including our own movement, will support him in the policies that are requisite to the pursuance of that target.

Mr. Healey: I believe that my hon. Friend speaks for the overwhelming majority in the Labour movement and for the overwhelming majority of the British people when he makes that judgment.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: We must press on. We are operating under a guillotine today.

NEW MEMBER

The following Member took and subscribed the Oath:

Peter James Bottomley Esq., for Woolwich, West.

STATUTORY INSTRUMENTS

Ordered,
That the draft Maximum Number of Judges Order 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Edward Short.]

NORTHERN IRELAND AFFAIRS

Ordered,
That the matter of the Northern Ireland Economy being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee for their consideration.—[Mr. Edward Short.]

STANDARDISATION OF CONTAINERS

4.1 p.m.

Mr. David Lane: I beg to move,
That leave be given to bring in a Bill to promote the standardisation of containers.
In the afterglow of last Thursday's happy event, on which I warmly congratulate my hon. Friend the Member for Woolwich, West (Mr. Bottomley), I hope that the House will give me leave to bring in this Bill to promote the standardisation of containers. I have in mind domestic containers and not the jumbo cargo-carrying containers that are largely standardised already.
The Bill is a modest contribution to the war on waste. In Britain we have become a throw-away, wasteful society. For various reasons we need to be more careful and, if I may use the word, conservative—"conservative" with a small "c" now, because my Bill has powerful all-party support, for which I am grateful.
Let me make it clear that I am not advocating uniformity, which is dull and undesirable. However, I believe that the variety of containers in use has become excessive. I suspect that that is also the majority view of the public, if my constituency is typical. Last March Cambridge University Survival, which is the university branch of the Conservation Society and Friends of the Earth, published the results of a survey of 600 householders in the city of Cambridge about the scope for glass reclamation in particular. Roughly nine people out of 10 supported the idea of greater standardisation of shapes and sizes of bottles and jugs, to facilitate re-use. They also said that they would not mind if more of the unusual shapes of bottles and jugs were to disappear.
My Bill would apply to other materials —notably plastics and tinplate—as well as glass. The world's limited natural resources are being used up frighteningly fast. Waste must be lessened by re-use and recycling on a larger scale. Greater standardisation will make re-use and recycling a more economic proposition. That is the reasoning behind the Bill, which is directed to one aspect of the problem of waste. It is time that we

paid more attention both inside and outside the House to this whole national problem.
In recent years there has been a proliferation of types, shapes and sizes of container. For example, soft drinks used to be sold only in returnable glass bottles. Now we can get them in non-returnable glass bottles, or in cans, or in one-trip plastic containers. Up to a point this is for the convenience of consumers, who appreciate variety and easy recognition, but does convenience really require not 57 varieties but over 5,000 different types of glass container on the British market? Or is this a case of variety gone crazy?
Among the different materials glass has been specially studied because a glass bottle can be either re-used or recycled —that is, fed back into the production process. I pay tribute to the research done by Friends of the Earth. We may not agree with all that body's conclusions, but it has helped to direct public attention to this and other problems in the whole field of conservation.
We all know that reluctant feeling when we throw away an empty tonic water bottle. It seems perfectly good for re-use, but no one wants it back. Non-returnable bottles are thinner than returnable ones and need less raw material, but returnable bottles can be used for anything from eight to 40 times. It has been estimated that if all glass bottles were returnable, glass waste—which is expensive to dispose of—could be reduced by approximately 7 million tons per annum.
I realise that the economics of all this are open to argument. The costs of collection, transport, sorting and cleaning must be taken into account. However, these costs would undoubtedly be smaller if the varieties of shape and size were fewer. I wonder whether many consumers would be mortally offended if the Scotch whisky bottle they had just drained in London were given a new lease of life with gin made in Lambeth or with rum imported from Jamaica before eventually it found its way, empty again, back to the Highland distillery?
I am not pretending that this is a simple problem with a simple solution. Total costs must be considered and not just energy costs. There are complications as regards cleaning and hygiene.


Some variety is essential and must continue. Legislation varies from country to country, and the export trade is important. Stupid restrictions on glass in particular would means more reliance on plastic and tinplate, which would add further to the import bill. I am not criticising the manufacturers, and especially the glass manufacturers who are anxious to promote rationalisation and have done much research to save energy and raw materials and to increase furnace efficiency.
Nevertheless, even allowing for all the factors that I have mentioned, there surely remains more room for sensible standardisation not only of glass containers but of other types as well. Many consumers would welcome it, and consumer choice in the end must be paramount. My Bill would give reserve powers to the Government to make regulations about types, shapes and sizes. But far better than Government intervention would be speedier progress in the direction of standardisation through the combined thoughts and efforts of consumers, bottlers and material manufacturers. I hope that the Bill will be a stimulus to those thoughts and efforts and to more public discussion and pressure.
The faster we can move towards sensible standardisation the greater will be the scope for re-use and recycling and the smaller will be our national waste. It is with that objective primarily in view that I beg to ask leave to introduce the Bill.

Question put and agreed to.

That the allotted days which under the Order [18th June] are given to the proceedings on Consideration and Third Reading shall be allotted in the manner shown in the Table set out below and, subject to the provisions of that Order, each part of the proceedings shall, if not previously brought to a conclusion, be brought to a conclusion at the time specified in the third column of that Table.

TABLE


Allotted day
Proceedings
Time for conclusion of proceedings


First day
…
…
Amendments to Clauses 1 to 8, new Clauses and new Schedules relating thereto and Amendments to Schedules 1 and 2.
9.30 p.m.



…
…
Amendments to Clauses 9 to 19 and new Clauses and new Schedules relating thereto.
11.00 p.m.


Second day
…
…
Amendments to Clauses 20 to 22, new Clauses and new Schedules relating thereto and Amendments to Schedule 3.
11.00 p.m.


Third day
…
…
Amendments to Clauses 23 to 30, new Clauses and new Schedules relating thereto, Amendments to Schedules 4 and 5 and any remaining new Clauses and new Schedules.
7.30 p.m.





Third Reading
11.00 p.m.

Bill ordered to be brought in by Sir Paul Bryan, Mrs. Millie Miller, Mr. Lewis Carter-Jones, Mr. Patrick Cormack, Mr. Geoffrey Finsberg, Miss Janet Fookes, Mr. Arthur Jones, Mr. Eric Moonman, Mr. John Pardoe, Mr. Anthony Steen, Mr. Richard Wainwright and Mr. David Lane.

STANDARDISATION OF CONTAINERS

Mr. David Lane accordingly presented a Bill to promote the standardisation of containers: and the same was read the First time; and ordered to be read a Second time upon Friday 11th July and to be printed. [Bill 189.]

BUSINESS COMMITTEE (INDUSTRY BILL)

Ordered,
That the Report [26th June] of the Business Committee be now considered.—[Mr. Harper.]

Report considered accordingly.

Question put forthwith pursuant to Standing Order No. 43 (Business Committee),

That this House doth agree with the Committee in the said Resolution.

Question agreed to.

The following is the Report of the Business Committee:

Orders of the Day — INDUSTRY BILL

[1ST ALLOTTED DAY]

As amended (in the Standing Committee), considered.

4.12 p.m.

Mr. Speaker: In order to save the time of the House during the guillotined proceedings on the Industry Bill, I propose to suspend the current experimental lengthening of the period allowed to hon. Members for reaching the Division Lobby.
Accordingly, today, tomorrow and Thursday, while the Industry Bill is under discussion, there will be an interval of four minutes, not six, between the appointment of the Tellers and my order to lock the doors.

Mr. Patrick Cormack: On a point of order, Mr. Speaker. Although personally I am quite happy with that arrangement, there will be many hon. Members in Norman Shaw House who will not have heard your announcement and who could he in difficulties.

Mr. Speaker: I have anticipated the situation. Measures have been taken to see that my statement was communicated through the usual channels much earlier today, and therefore hon. Members will have been warned.

Clause 1

THE NATIONAL ENTERPRISE BOARD

Mr. Douglas Crawford: I beg to move Amendment No. 128, in page 1, line 6, leave out' a body' and insert 'bodies'.

Mr. Speaker: With this amendment, I understand it will be convenient to take the following amendments:

No. 129, in page 1, line 7, after second 'Board")' insert 'and the SDA'.

No. 130, in line 9, at end insert:
'as regards England, functions in Scotland to be carried out by the SDA which will be the direct responsibility of the Scottish Assembly, immediately upon the establishment of that Assembly'.

No. 131, in line 9, at end insert:
'(1A) For the avoidance of doubt in this Act and its accompanying Schedules, in the furthering of the development of Scotland's economy and improving its environment, the SDA shall be the only statutory body of its kind. The Board shall exercise no power, jurisdiction, or control whatsoever over companies, institutions, partnerships, nationalised industries and all other industrial and commercial bodies operating in Scotland, irrespective of the geographical location of the head office or of the registered office of such companies, institutions, partnerships, nationalised industries and other industrial and commercial bodies'.

No. 164, in line 9, at end insert:
'(2) The National Enterprise Board will have powers extending throughout England; it shall have no authority in Wales or Scotland where the functions of economic development shall be undertaken, by Welsh and Scottish Development Agencies, respectively'.

No. 132, in line 10, after 'Board', insert 'and the SDA shall each'.

No. 133, in Clause 2, page 2, line 19, leave out 'United Kingdom' and insert 'England'.

No. 134, in line 20, leave out 'United Kingdom' and insert 'England'.

No. 135, in line 21, leave out 'United Kingdom' and insert 'England'.

No. 136, in line 25 leave out 'United Kingdom' and insert 'England'.

No. 137, in line 39, leave out 'United Kingdom' and insert 'England'.

No. 138, in Clause 3, page 3, line 23, at end insert 'in England'.

No. 139, in line 24, leave out the first 'The' and insert 'These'.

No. 140, in line 28, at end insert 'in England'.

No. 141, in line 30, at end insert 'in England'.

No. 142, in Clause 4, page 4, line 39, at end insert 'in England'.

No. 143, in Clause 6, page 5, line 17, after 'functions', insert 'in England'.

No. 144, in Clause 7, page 5, line 38, at end insert:
'for England, this without prejudice to the budgets proposed for the SDA'.

No. 146, in Clause 9, page 7, line 10, leave out 'United Kingdom' and insert 'England'.

No. 147, in line 11, leave out 'United Kingdom' and insert 'England'.

No. 148, in line 12, leave out 'United Kingdom' and insert 'England'.

No. 149, in line 19, leave out 'United Kingdom' and insert 'England'.

No. 150, in Clause 10, page 7, line 26, leave out 'United Kingdom' and insert 'England'.

No. 151, in line 27, leave out 'United Kingdom' and insert 'England'.

No. 152, in line 40, leave out 'United Kingdom' and insert 'England'.

No. 153, in line 42, leave out 'United Kingdom' and insert 'England'.

No. 156, in Clause 17, page 13, line 19, after 'State', insert
'the Secretary of State for Scotland and the Secretary of State for Wales in England, Scotland, and Wales respectively'.

No. 157, in Clause 18, page 13, line 41, after 'State', insert
'the Secretary of State for Scotland and the Secretary of State for Wales in England, Scotland, and Wales respectively'.

No. 158, in page 13, line 43, leave out 'he' and insert 'they'.

New Clause 5—"Limitation on powers in sections 10 and 11."

Mr. Crawford: We are seeking a categorical assurance that there shall be no operations by the National Enterprise Board in Scotland. We are seeking to nail down the intentions of the Government, and also the situation in regard to the operation of the Scottish Development Agency in relation to the NEB. No doubt one of the Members of the Plaid Cymru will wish to say something about the Welsh Development Agency and its relationship to the amendments.
We were told by the Secretary of State in the debate on the Scottish Development Agency Bill on 25th June,
My right hon. Friend the Secretary of State for Industry and I will be working out the details of that relationship and in due course we shall be issuing guidance to both sides. This will be done once the two bodies are established and are able to make their own suggestions about what the relationship should be. But the guidance will deal, among other things, with arrangements for the NEB's own functions in Scotland. This guidance will make clear that the SDA will normally be responsible for schemes concerning companies wholly or predominantly based in Scotland. Where its actions or the actions of the NEB could have an effect on employment in Scotland, the NEB would be expected to exercise its powers in full consultation with the SDA.
One point worth stressing is that there will be no rigid demarcation between a class of

companies or undertakings in Scotland which are the concern of the agency and others which are to be reserved to the actions of the NEB."—[Official Report, 25th June 1975; Vol. 894, c. 474.]
We in the SNP want to put the matter beyond all shadow of doubt. Therefore, we have covered the situation in Amendment No. 131 and the wording contained therein. We are not interested in anodyne phrases such as "in due course" or "issuing guidance" or about the two bodies SDA and NEB making their own suggestions about what the relationship should be.
I refer to what the then Secretary of State said in intervention in my speech on the Industry Bill on 17th February 1975:
I should not like the hon. Gentleman to continue his speech under a misapprehension. The Scottish Development Agency will be the subject of special legislation and the consultative document has been issued. Following the statement in the White Paper, power finder Clause 7 of the Industry Bill will be transferred to the Secretary of State for Scotland in July of this year when the necessary administrative arrangements have been made. Therefore, he must say what he has to say about the NEB against that back-ground."—[Official Report, 17th February 1975; Vol. 886, c. 1015.]
If that is the case, I look forward to the support of the Secretary of State for Industry and his successor as Secretary of State in the Lobbies on these amendments.
The questions were raised when we discussed similar matters in the SDA debate last Wednesday. The hon. Members for Glasgow, Queen's Park (Mr. McElhone) and for Renfrewshire, West (Mr. Buchan) referred to the rôle of the SDA and NEB in relation to the rôle of multinational companies operating with United Kingdom-wide interests in Scotland. The question of British Leyland was mentioned by the hon. Member for West Lothian (Mr. Dalyell). This referred not only to British Leyland in Scotland and Honeywell but also to Hoover, Ferranti, NCR, Borroughes and others who have their Scottish interests well looked after by the Scottish Development Agency. I am sure that the hon. Member for Caernarvon (Mr. Wigley) will make similar comments about Welsh interests.
The Scottish Development Agency should be a body with its own rôle and money beginning with an annual budget


of £100 million rising to £300 million in the fifth year, and with offices throughout the world and in Scotland. A number of hon. Members in the debate last week regarded that idea as absurd, but we regard the suggestion as a necessity which we shall continue to press on the Scottish electorate.
Today the vote on this group of amendments will show the people of Scotland what party has their true interests at heart. We do not want to see control over our industries by the London-based NEB. Centralisation has gone far enough. What we propose is a practical suggestion and it paves the way for the time when—and it is not far distant—we shall have a sovereign Parliament in Scotland.
If these amendments are opposed, no longer will the Government spokesman be able to claim any autonomy for the SDA and no longer will he be able to claim that there will be any real independent or economic powers for the Scottish Assembly. We know that the Scottish Trade Union Congress wants the powers, but that the Scottish Labour Party does not require them. We do not know what the Scottish Tory Party wants because it has not yet made that clear.
I want the Minister to give a categorical assurance that monetary priority will be given to the SDA over the NEB and that, if anything must be cut, it must not be the Scottish Development Agency. Will the Minister consider increasing the budget of the SDA and will he give a firm assurance about the autonomy or otherwise of the agency?
If these amendments are not accepted we shall seek to divide the House to show people of Scotland that we do not want the NEB to have any say in the industrial economic future of Scotland.

Mr. Dafydd Wigley: I rise to support what has been said by the hon. Member for Perth and East Perthshire (Mr. Crawford) and also to speak to an amendment which has been linked with the one that we are at present discussing, namely, amendment No. 164 which is in my name and the names of my hon. Friends the Members for Carmarthen (Mr. Evans) and Merioneth (Mr. Thomas).
To some extent I debated this matter in the Industry Bill Committee in an attempt to understand what would be the relationship between the National Enterprise Board and the Welsh Development Agency. The same attempt was made during Second Reading a few months ago in this Chamber. We had meetings with the then Minister of State, outside the Chamber, and last week, in the debate on the WDA, again we attempted to receive adequate answers about the inter-relationship that was intended between the NEB and the WDA.

Mr. Crawford: The hon. Member will also be aware that the Scottish National Party was denied membership of the Industry Bill Committee which was discussing this matter.

Mr. Wigley: Yes, I was very much aware of the fact that the SNP had been denied membership of the Committee. Indeed, I should have welcomed their presence to reinforce my case. I have no doubt that hon. Members of the Conservative Party will support the amendment proposed by the hon. Member for Perth and East Perthshire, because I understand that the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) put forward a similar amendment in Committee. Therefore, no doubt the Conservative Party will put the weight of its support behind the amendment.
What is in question is the relationship between the NEB, the WDA and the SDA. Statements have been made suggesting that the WDA will have responsibility for dealing with all companies that exist completely in Wales. All companies that straddle the Wales-England border, and operate in both Wales and England, apparently will come under the NEB. However, we are told that the WDA will have some function—it will be allowed to co-operate with the NEB.
I have had discussions with many companies in Wales and with people who have detailed involvement in industry. They are totally at a loss to know how they will deal with this undefined responsibility. I am referring to people who work not only in individual companies but who are concerned with the Welsh Development Corporation, the CBI in Wales and the trade unions. There


is a big question mark which has not been adequately defined.
In the Bill, even as amended, there are powers which will go to the NEB but which will not go, in the case of Wales and Scotland, to the Welsh and Scottish Development Agencies. Therefore, companies that exist only in Wales or Scotland will be subject to some restrictive powers, whereas those that straddle the borders will be subject to greater powers that come under the NEB.
This position creates a great question mark. If those powers are desirable, we should want them in Wales for the WDA. If they are undesirable we should not want the NEB poking its nose into Wales and causing concern. The importance of this point will be appreciated by the Secretary of State and the Minister because, of the companies that employ over 100 employees in Wales, some 70 per cent. of them are companies that have branches or subsidiaries in Wales. Therefore, this question is of fundamental importance.
On the basis of the legislation that is proposed in this Bill, and also in the Bills that will come forward for the WDA and the SDA, I cannot see how it is possible to build up sufficient liaison between these bodies. There is only one way in which there can be a clearly defined and clear-cut solution and that is if the WDA has total responsibility in Wales for all these activities. If the responsibilities are sufficient for those companies, however large, that exist only in Wales, surely this body must have the strength to deal also with companies that straddle the border.
I ask the Secretary of State and the Minister of State what is the position of a company which has its head office in Wales but which may have a branch in England? Will that company come under the WDA or the NEB? What is the position of, say, a supranational company that has branches in Wales and Scotland but not in England? Will that company come under the WDA and SDA or the NEB? Satisfactory answers have not been given to those points. Moreover, how is the allocation of money to be made? Will the NEB have a certain proportion of the money allocated in the Bill for spending in Wales or Scotland,

or is that money entirely for its activities within England with separate allocations under the WDA and the SDA? All these are important points which have not been adequately answered.
Time and time again, we have tried to get answers from the Government, but time and time again it has been made patently clear that the Government have not the foggiest idea how these bodies will work with each other. For that reason we have tabled amendment No. 164. I also support the amendments proposed by the hon. Member for Perth and East Perthshire.

Dr. Jeremy Bray: I wish briefly to say that I am sure that it is the overwhelming view of the great majority of people in Scotland and Wales that the NEB should be able to operate with unfettered freedom to the benefit of the Scottish and Welsh people. The view that has been expressed by Opposition Members would confine the operations of the NEB and damage the interests of the Scottish and Welsh people.

Mr. Douglas Henderson: My first reaction on hearing the mercifully brief intervention by the hon. Member for Motherwell and Wishaw (Dr. Bray) was to recollect the effect which the British Steel Corporation—a centralised body—has had on the industrial life of Scotland. I think that the hon. Gentleman may have joined some of the criticisms of the corporation's rôle.
We are discussing the whole issue whether the economies of Scotland and of Wales should be centralised and controlled by a body which operates in London. It is very significant that the Government have introduced a Bill for a Scottish Development Agency, which we warmly support, and a Bill for a Welsh Development Agency. However, they have not introduced a Bill for an English Development Agency because the NEB would, in anyone's view, fulfil that particular function. I cannot understand the logic of saying that with a Scottish Development Agency and a Welsh Development Agency there will be a big brother—a massive, multipowered, well-financed well-heeled big brother—to take all the big decisions, whereas the WDA and the SDA are to be left with minor


decisions and minor projects. It would be logical to have a National Enterprise Board for the United Kingdom, if there were also an English Development Agency, because then there would be a consistent relationship.
I see that the hon. Member for Motherwell and Wishaw (Dr. Bray) is indicating, from a sedentary position, that this legislation is coming. I do not know how privy he is to the Government's legislative programme, but we have had no sign of it yet, and there is nothing in the manifesto about it.
The people of Scotland and Wales have suffered for far too long from centralisation and from industrial and political decisions being taken outside their borders. In my view sometimes the nationalised industries get far too much stick from people who should know better. Whatever the rights and wrongs of the nationalised industries, what we have seen has been a centralisation of decision making outside of our borders, to the detriment of our countries. I should have thought it quite practical and feasible for the Government to recognise the wish of the people of both Scotland and Wales to have control of the public investment to be made in their countries without people in London making the decisions. I should have thought that they would understand that many other small countries have development agencies which deal with a vast host of multinational and other companies whether or not they have registered offices in those countries.

Mr. Crawford: I hope that my hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) realises that in the context of registration he has an ally in the hon. Member for Glasgow, Queen's Park (Mr. McElhone) who, in the debate on the Scottish Development Agency, said:
We must accept that cross-border companies and multinational companies must in time have separate Scottish company registration."—[Official Report, 25th June 1975 Vol. 894, c.520.]

4.30 p.m.

Mr. Henderson: I am grateful to my hon. Friend for that telling point. Scotland has suffered from over-centralisation for too long. We have seen the concentration of investment, talent and power

outwith Scotland to the extent that the Scottish Council has estimated that although Scotland has approximately 10 per cent. of the population of the United Kingdom. it has less than 2 per cent. of the decision makers.
The amendment should be accepted by the Government. I do not give up hope entirely, because the new Secretary of State is a well-known friend of Scotland and Scottish interests. If he accepts the amendment, he will thereby assure the Scottish people that the agencies which are to operate within Scotland's borders will have no interference from the National Enterprise Board.

Mr. John Horam: The Scottish National Party and Plaid Cymru have misunderstood the nature of the situation concerning the National Enterprise Board. I have considerable sympathy for the basic view that there has been too much centralisation and too many decisions taken in London. But I am sure that hon. Gentlemen opposite will agree that the North of England has suffered just as much as Scotland and Wales in that respect. Indeed, we are anxious to get some kind of devolution.
The NEB has a number of functions. Some are clearly national. While we retain the United Kingdom in its present form, decisions will have to be taken on a national basis. But some matters are regional. We must concentrate the resources of the Scottish and Welsh Development Agencies on their own regional problems. They must be the focus for their regional economic problems, just as the NEB concentrates on more national problems. We cannot break up a national company into its constituent parts and deal with the Welsh subsidiary by means of the Welsh Development Agency and the rest of it by means of the NEB. We must work out a regional strategy within the STA and the WDA and a national strategy within the NEB.

Mr. Crawford: I am grateful to the hon. Gentleman for giving way, especially as he is a Fellow of the same college as I attended at Cambridge. Scotland is not a region; it is a nation. That is what differentiates Scotland and Wales from the North-East of England, the North-West, and so on.

Mr. Horam: We are entering on difficult ground. I should not care to pursue that sophisticated point.

Mr. Crawford: It is basic.

Mr. Horam: It may be basic, but it is also sophisticated in terms of this debate. We are talking about regional economic planning within the United Kingdom.

Mr. Crawford: We are not.

Mr. Horam: I am, anyway. I agree that fundamentally the two branches of the NEB exist to further regional economic concepts and devolutionary planning within Scotland and Wales.

Mr. Wigley: What does the hon. Gentleman mean by "the two branches"?

Mr. Horam: The Scottish Development Agency and the Welsh Development Agency.

Mr. Wigley: I wonder whether the Secretary of State would care to intervene on that point?

Mr. Horam: While it is true that the NEB must concentrate on national economic problems and the Scottish and Welsh Development Agencies must concentrate on regional problems within the borders of Scotland and Wales, none the less an immense gap is still left in regional planning. I should like to see the development of a mini-NEB on the lines of the Scottish and Welsh Development Agencies for the English development regions. I should like to see a North of England Development Agency, a Merseyside Development Agency and a South-West of England Development Agency. Those are the three development regions within the borders of England.
We need development agencies to pursue regional economic planning in those areas. That would be a logical set-up within the confines of present thinking. It would be a major development to expand the NEB in that way by spawning further NEBs. It would command considerable support not only from my hon. Friends but from some hon. Gentlemen opposite. It would make clear cut what I hope is the Government's view—it is certainly mine—that, as long as the United Kingdom remains as it is, the NEB should tackle national problems and that regional problems should be tackled by regional

development agencies based in the regions, the North of England Development Agency being based in Newcastle.

Mr. Nicholas Fairbairn: I support the amendment moved by the hon. Member for Perth and East Perthshire (Mr. Crawford) whose faith in Scottish education required him to go to an English university.

Mr. Crawford: An international university.

Mr. Fairbairn: It became international when the hon. Gentleman went there. The hon. Gentleman was hurt at not having been a member of the Industry Bill Committee and having to restrict his attendance on the Community Land Bill Committee in order to be here this afternoon.
Socialist philosophy appears to be to remove from flourishing private industry by taxation the funds which would otherwise be available for investment and to set up a bureaucracy to invest those funds.
The National Enterprise Board is intended to meddle with flourishing private industry and to extend nationalisation and bureaucracy. One of the major problems in this country is the growing imbalance of bureaucracy and State interference, whether it be with industry or anything else. Under this Government we see it as an accelerating programme which vastly increases our borrowing requirement.
When the Bill first entered Committee, I do not think that the Government appreciated that Scotland would have these two agencies which essentially carry out the same activities. They will interfere in private industry in Scotland. One will be based in London and the other will presumably have its headquarters in Edinburgh. However, both will be bureaucratic organisations essentially answerable to nobody. Both will presumably have separate policies and will spend a good deal of their time discussing whether each should do what the other intends to do. I do not believe that either one of these agencies is a good idea.
If money is available for investment in industry in Scotland, let us have it. There are innumerable agencies in Scotland which can spend it without setting up mg one but two new fetters on Scottish in, dustry. If the Government have money


available for investment in Scotland, let us have it. We do not need a brontosaurus bureaucracy in London and another in Edinburgh attempting to interfere with the sensible development of sophisticated go-ahead industry in Scotland. We believe that the agencies, not the funds, will do great harm to industry in Scotland.

Mr. Crawford: I should like to emphasise that, while we are grateful for the hon. and learned Gentleman's support, we support a Scottish Development Agency because we want more jobs and investment in Scotland. We do not want a National Enterprise Board in Scotland. While we welcome the hon. and learned Gentleman's support, we do not go all the way with what he is saying.

Mr. Fairbairn: The Conservative Party also wants jobs and investment in Scotland, but we do not need to set up another bureaucratic organisation to spend the money. That is where I part company from the hon. Gentleman. We have plenty of agencies for that purpose in Scotland. But if we must have one, we do not want both. To be Scottish for a moment, if we are to have any, let us have one in Scotland, not in London.

Mr. Gordon Wilson: The Government appear to be suffering from split decision making. They do not seem able to make up their mind whether there should be a development agency in Scotland and another in the United Kingdom. We have confusion drifting into the debate already on the ground that the Scottish Development Agency might be the second cousin twice removed of the NEB, which is the main relative. The trouble is that this confusion is likely to breed even more when we see the two organisations in operation.
My hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) said that one of the main problems was that for many years Scotland had suffered from a lack of decision making and that there had been a drift of the decision making power towards the centre. On the one hand, we have the Government's intention to set up a Scottish Development Agency and a Welsh Development Agency. That would be a good start, because it would at least indicate that

certain decision making powers would return to Scotland.
On the other hand, the Government have produced the Industry Bill, the terms of which do not exclude Scotland and Wales. It sets up the National Enterprise Board which will act as a development agency for England and, with its controlling and decision making powers, as a development agency for Scotland. Why should we have another agency for Scotland? The Government have already introduced two Bills, one in this House and one in another place, to give legislative sanction to the Scottish Development Agency. Now they are to introduce this confusion in the Industry Bill, and it goes much deeper than the basic administrative confusion which is likely to result.
One of the problems in Scotland has been that when private firms have been taken over, there is a systematic stripping away of functions. This happens in the multinational corporations where there is no competition between one branch and another. Centralised groups tend to hog certain functions to the centre. In the past these have included research, development, quality control, production planning, production control, stock control, resources allocation, materials buying, computer services and legal and tax services where they could be divorced from the Scottish legal code. A recent article by Dr. John Firn of the Economics Department of Glasgow University pointed out that nationalised industries are among the greatest centralisers which strip away decision making powers from Scotland. When the steel industry was nationalised, steel-making areas which had autonomy did not retain it. The industry was deliberately shaken up into another form and the resulting corporate divisions lost much of their natural efficiency and decision-making powers.
The planning division of the Scottish steel industry, which had been responsible for the planning and development of Ravenscraig and had also worked on planning projects with industries outside the United Kingdom, was dissolved. Its functions were taken away from Scotland and the skilled experts, organisers and technocrats had to move to other parts of the corporation.
If this is happening in multinationals in the private sector as well as in the public sector, what sort of salvation is there for Scotland in this Bill? The Scottish Development Agency is intended to be the means by which economic and decision making powers can be returned to Scotland. But it will not have power to control the activities in Scotland of multinational private firms or nationalised industries. These controlling and planning powers will be reserved for the National Enterprise Board. In the past, in both the private and public sectors there has been centralising activity and a transferring of powers from the periphery to the centre. What sort of help will Scotland get from the Board which will itself be a centralised body? It is intended that it should operate throughout the United Kingdom and have a guiding or advisory effect on multinationals and nationalised industries, but, by the nature of the beast, it will be a centraliser itself. What is the purpose of that?
The main concern in Scotland is to bring back power. This is what the Government's policy on devolution is supposed to achieve. It is supposed to remove power from this place and Whitehall and transfer it back to Scotland.
4.45 p.m.
The Government's intentions in industrial matters and their intentions on the political, administrative and devolutionary questions are plainly at variance. If they intend to set up a Scottish Assembly they must give it something to do. This afternoon I raised with the Prime Minister the fact that the STUC and the Scottish Council (Development and Industry), both representing, in their own ways, aspects of industrial activity in Scotland, wanted economic powers to go to the Assembly. One of the best ways of doing that would be to have a strong development agency answerable to the Assembly. What power can the Assembly have over the National Enterprise Board? If the board has statutory power to interfere with various important aspects of industry in Scotland, what power will the Assembly have to call it to task?
Are the Government to say that the board would be answerable to Scotland where it pursued Scottish objectives—

answerable to the Minister of Industry for Scotland, the Chief Executive or Prime Minister of Scotland or the Secretary of State for Scotland, or whatever executive arm of government is to be used—and at the same time responsible to the Secretary of State for Industry in this House? This will place the board in a schizophrenic position. Surely the old Biblical adage is true enough that
No man can serve two masters.
yet the board is to be expected to do that in Scotland.
The Government can shrug off this matter and say that the board will be able to follow through its objective, as seen by the Secretary of State for Industry and Parliament, of being a medium for economic planning in the United Kingdom. But this might not be allowed by the Scottish people, and the employees of the board will be in a very difficult situation over the question of answerability.

Dr. Bray: The hon. Gentleman takes a very dim view of democracy. There is nothing against a master having two servants, so why should the Scottish people not be served by both the board and the agency?

Mr. Wilson: I am impressed by the question, but it brings us back again to the responsibility of these servants. The board will have two masters—the Secretary of State for Industry in this House and, possibly, the Scottish Minister of Industry in the Scottish Assembly.

Mr. Wigley: This point was raised in Standing Committee. We asked whether the term "Secretary of State", as it appeared in the Bill, referred only to the Secretary of State for Industry or whether it was an all-embracing term including the Secretaries of State for Scotland and Wales. The answer was that it was an all-embracing term. This would give the board triplicate responsibility which appears to me totally impossible.

Mr. Wilson: I am grateful to the hon. Member for that intervention. He served on the Standing Committee. Every hon. Member, from whichever party, who served on that Committee deserves a medal for the work done on that marathon. The hon. Member's intervention enhances the point I was making. We shall head for administrative and constitutional conflict.
One of the first things any Scottish Assembly would do would be to try to get its hands on any body which tried to conduct industrial policies which might be at variance with its own aims. The Scottish Assembly must by its nature be against centralisation. This line of thought is emerging from so many springs in Scotland that it is welling up into a torrent and it is one reason why the Government are bringing forward proposals for parliamentary as well as administrative devolution.
The SDA will be provided with either £200 million or £300 million for an indefinite period depending upon when and if the Government come back to Parliament for more money. Once the Scottish Assembly is established in Scotland, there will be a demand for it to have control over or access to the revenues coming from oil. I have no doubt that hon. Members will say that the SNP is off on one of its well-worn tracks again. The track may be well worn, but it is a very popular one in Scotland. As I mentioned to the Secretary of State for Industry before his change of responsibilities from energy matters, this question of access to oil revenues is a matter which has cropped up not only in the United Kingdom. It has occurred also in Canada where Newfoundland is denying the right of the Federal Government of Canada a share of any oil or natural gas which may be discovered off the Newfoundland coast. The same thing is happening in Australia where the Government of Western Australia is unilaterally confirming oil and natural gas exploration licences against the will of the Federal Government.
The first thing people in Scotland will want to know is what happens to the money from the oil. They will insist that it goes to the SDA, and the Government who are in power at that time will come under very strong pressure from the Scottish people and the Scottish Assembly, regardless of politics, for the money to be used for Scottish purposes. I never fail to be amazed at the way in which the Government take it for granted that if they set up a Scottish Assembly and if it is controlled by the Labour Party it will immediately fit in with the policies produced at Westminster. The same thing applies to the Conservatives. I can

assure the Government and the Opposition that a Labour administration in the Scottish Assembly would automatically and very naturally seek to bring pressure to gain the maximum benefit for the people who voted for that administration.
This leads me to the difficult situation which the NEB will face in operating in Scotland. There will be two bodies responsible for administering industrial activity. They could not but help being at variance with one another. It may be hoped that the unfriendliness which stems from the clash of responsibilities will elide and it may be possible by negotiation to prevent the points of friction from getting too hot.

Sir Raymond Gower: Has it occurred to the hon. Member that if the activity of the main authority is confined to England, and if the development authorities in Scotland and Wales are left to carry out all the development in those parts of the United Kingdom, the three authorities will be competing and that the much stronger resources of the English body will tend to prevail? In those circumstances would it not be an advantage for Wales and Scotland to have an authority, the writ of which runs throughout the United Kingdom?

Mr. Wilson: This situation will naturally always arise in any sphere of operations, and it has been a fundamental philosophy in favour of larger units, of rationalising and of cost benefits from cutting, for example, the research and development functions in Scottish factories. The belief is always that strength comes from the big unit.

Mr. Crawford: Mr. Crawfordrose—

Mr. Deputy Speaker (Mr. George Thomas): Order. I would remind the hon. Member for Perth and East Perthshire (Mr. Crawford) that he has made about five interventions since he used his time to address the House, and that we are under the guillotine today.

Mr. Crawford: My intervention was on that very point, Mr. Deputy Speaker.

Mr. Deputy Speaker: I am simply reminding the hon. Member that if everybody behaved like that we would not get very far.

Mr. Wilson: I was about to give my hon. Friend one last chance of intervening, but instead I shall try to conclude my own remarks. I was dealing with the argument about the advantage of size. Many Scots went along with that argument for many years. For example in the 1920s the railways were amalgamated and rationalised. In the 1930s, the 1940s and the 1950s one industry after another in Scotland was taken over. The ultimate experience is that it is far better to have individual units which are capable of thriving and working and, if necessary, fighting alone to safeguard their own existence. The interests of the smaller parts are not always safeguarded by the policies of the larger units. That is fundamentally why I would disagree with the hon. Member for Barry (Sir R. Gower).
The second reason I oppose the argument for large units concerns the assumption that the Scottish Development Agency would necessarily be a weaker body in terms of finance. Let us not forget the question of the oil revenues. The SDA might well be a stronger unit in terms of available financing for industrial development. This point of having real money rather than paper money has occurred to many people in Scotland.
Bodies such as the Scottish Council Research Institute in considering economic planning in the United Kingdom have looked into the centralisation which has taken place in both the private and public sector. They have considered centralisation of Government Departments and the effect it has on Scotland where so much decision making power has been stripped away. The institute came to the view in the course of a report published only last year that it would be far better for the United Kingdom as a whole if local policies were pursued as far as possible because if there is efficiency in the component parts, the sum of the parts adds up to a much stronger whole. The advocacy of a total United Kingdom approach is a stance I rarely adopt in this House. I urge the House to accept the amendments.

5.0 p.m.

Mr. Andrew Welsh: The changed political climate in Scotland has shown the need for a change in outlook in London towards the needs of Scotland.

It is important that there should be a Scottish oriented and mandated development agency. We need a development agency in Scotland to think seriously about Scottish conditions. It is important that that organisation should be equipped with a realisation of Scottish economic history, and our record of low wages, high emigration, high unemployment and poor environment. As the House will discover this week, much needs to be done in Scotland. Too often decisions have been made in London without a basic knowledge of Scotland and her background.
We need a workhorse organisation to get to the roots of these problems. If the agency is to do so, it must have adequate finance. If it has this equipment—the Scottish National Party amendment seeks to give it the necessary powers—the Scottish Development Agency can be of service to Scotland. It is important at all times that an organisation should be created to do a job of work for Scotland. We want to see an end to this branch factory mentality which has gone on for far too long and which has cost Scotland so much in past damage. An SDA with adequate decision-making powers, and free from the domination of the NEB in London, can undertake that task if it is allowed to take Scotland's needs and conditions into account.
We wish clearly to spell out the need for an end to the policy of London centralisation, to which we have grown used. We wish to see Scottish-based minds planning in Scotland for Scottish needs.

Mr. Michael Heseltine: I wish to speak about the impact of these amendments and the attitude of my party to what was said earlier. Anyone who has considered the proposals contained in the Bill—it can be dissociated from a Scottish development agency and a Welsh development agency—knows that virtually all the powers which are necessary to help industry with its legitimate problems were dealt with in the Industry Act 1972. After that law, only one issue was open for serious debate—whether the powers of the Industry Act 1972 should be administered by an agency or by a Government Department. I understand the merits of that argument.
However, that is not the argument today. Today's argument is that, in addition to the Industry Act 1972, a range of new possibilities should be proposed. We must, therefore, concentrate on the argument whether the NEB will contribute to the Scottish or Welsh development agencies anything which it is not otherwise capable of doing, once we have accepted the need for an additional agency in excess of what the Industry Act 1972 provides.
I recommend the Opposition to support the amendment. If we accept that there is, in the proposals for the National Enterprise Board, nothing which adds meaningfully to the solution of industrial problems which is not provided under the Industry Act 1972 it is right to resist the temptation to allow the NEB to spread its remit into Scotland. In addition to the powers provided by the Industry Act 1972, or through the authorities that I have mentioned, one of the principal purposes of the NEB is to nationalise profitable manufacturing companies. That remit of the NEB is not mirrored in the Scottish or Welsh development authorities.
This is the most realistic interpretation of the debate. Should there be a London-based organisation, acting for Scotland and Wales, as well as England, with the function of buying into profitable, free enterprise companies in Scotland and Wales and to transfer the power of decision making of those companies to London away from Scotland and Wales?
My own view is that there is no shred of justification for saying to the people of Scotland and Wales that their flourishing private sector companies should not be run, managed and operated in Wales and Scotland but should be operated from the central administration in London. There is no evidence for that. I spent the weekend in Dumfriesshire. Tomorrow I shall go to Glasgow. I expect that the arguments I shall hear from all sides will be clearly to the effect that the people of Scotland are well content to manage their own affairs within Scotland.
I believe that this legislation, with the legislation for the nationalisation of the aircraft and shipbuilding industries, will transfer the control over the Scottish shipbuilding and aircraft manufacturing

industries from the Scottish people to London. That is an additional reason why this proposal should be resisted.
The arguments are clear that there is only one motivation which encourages the Government to put this proposal before us. They want a vehicle intended to spread nationalisation to Wales and Scotland in a way that the development authorities of those countries are not empowered to do. We shall naturally resist that proposal.
I hope that the Minister will not say that the people of Wales and Scotland should be grateful to the Government, as there are now development authorities in their national names, and that they will also enjoy the benefits of the National Enterprise Board to be bestowed on them. The House will not find it acceptable if the Under-Secretary, in reply, argues along those lines, when the people of Wales and Scotland have already taken on board the industrial policies of the Government and when the Government's economic policies are in ruins.
Far from their being justified in talking about the regeneration of British industry or the expansion of investment opportunities, in reality investment will decline by 15 per cent. next year, and the people of Wales and Scotland will suffer most. The unemployment levels in this country will be the highest since the war. Unemployment will be highest in Wales and Scotland. The theory of this legislation, in view of the economic hardships which the people of Wales and Scotland will suffer as a consequence of the policies of the past 14 months, is a travesty of the industrial policies which the Government should bestir themselves to put forward.

Mr. Norman Buchan: I expect to hear this kind of nonsense from the Opposition. Why must it be accepted so easily that unemployment must be more serious in Scotland and Wales? There are efficient Scottish trade unionists fighting these issues. If we take into account the other areas of England and Wales, the figures show that the worst unemployment is not in Scotland.

Mr. Heseltine: The only way in which we shall ever establish the facts is to wait. The hon. Gentleman must exercise only a


little more patience before he discovers that what I have said is true.
The people of Scotland and Wales, living in the areas which have always traditionally suffered, will find that the impact of the economic policies now being pursued in this country will threaten more jobs and destroy more investment than have been threatened or destroyed at any time over the past two decades. It is frightening that hon. Gentlemen have not seen the dangers to Scotland and Wales of this legislation and of the economic strategy of the Government. The people of those countries will not be deceived.
To make the position of the Conservative Party clear I recommend that we support this amendment.

The Under-Secretary of State for Industry (Mr. Gerald Kaufman): Before turning to the serious arguments put forward by the Members of the Scottish National Party and Plaid Cymru, I should like to deal with the remarks of the hon. Member for Henley (Mr. Heseltine). The hon. Gentleman—who was not facing the Opposition, as I was—was not in a position to observe the amused contempt on the faces of the hon. Members representing constituencies in Scotland and Wales who share the Opposition benches with him when they saw the opportunism with which he reacted to their amendment, which they put down for the honest reasons which brought them to the House.

Mr. Fairbairn: Mr. Fairbairnrose—

Mr. Kaufman: I will come to the point raised by the hon. Member for Kinross and West Perthshire (Mr. Fairbairn) in a moment. The hon. Member for Henley is indeed himself a Welshman, as we know, but when he sought to be elected for a Welsh constituency he was rejected by a massive majority and he had to come to Oxfordshire in order to sit in the House of Commons, in the same way as the hon. Member for Perth and East Perthshire (Mr. Crawford) had to come to Cambridge to be educated.
The hon. Member for Henley talked about unemployment. He is, in fact, an expert on unemployment. He was a member of the Government which produced a million unemployed very shortly after coming to office. I point out to him that when we had a million unemployed,

as the result of the policies of his right hon. Friend the Member for Sidcup (Mr. Heath), it was the North-East which had higher unemployment than Scotland.

Mr. Tim Renton (Mid-Sussex): On a point of order. Is it appropriate for the Under-Secretary of State to talk in these terms about the past history of unemployment when we are under the guillotine and have a great number of amendments to discuss in a short time?

Mr. Deputy Speaker: I am in the happy position that I am not responsible for what either side say, but both sides are aware that there is a guillotine.

Mr. Kaufman: The hon. Member for Henley spoke at some length about unemployment and I am perfectly entitled to reply. He said that when unemployment came, Scotland and Wales would be the worst hit. They have always been very unhappily hit by unemployment, and we recognise that. At the same time, I point out again that, when the right hon. Member for Sidcup gave us a million unemployed, the North-West had more unemployed than Wales. I do not boast about it. It is a fact.
These are problems which are shared by all the neglected areas of the United Kingdom, and it ill behoves us for opportunistic reasons to play to one gallery or another.
The hon. Member for Henley cut no ice whatever with Plaid Cymru or the SNP in his remarks. He appears to believe that the Industry Act 1972 was the last word in industrial policy in this country and that nothing more needs to be done following that. If that were the case, industry in this country would have been restructured as a result of that Act, and we should not be facing the grave problems of industrial restructuring that we face, to deal with which is one—but only one—of the objectives of the Bill before us.
The fact is that the hon. Member for Henley supports these amendments because he hopes that perhaps by uniting with the other parties on the Opposition Benches he may defeat the Government. He does not support them for any other reason. He, like the hon. Member for Kinross and West Perthshire, who is a good deal more open about it, simply wants to wreck this Bill. It can be done


perfectly openly. The hon. Member for Kinross and West Perthshire made many extremely interesting speeches in Standing Committee in which he made no bones about this. It will not do to suggest that the Tory Opposition are supporting other Opposition parties—we have several of them, as the hon. Member for Colne Valley (Mr. Wainwright) often points out—for reasons other than total opporttunism.

Mr. Fairbairn: Does the Minister appreciate that in Committee there was an amendment in my name and that of my colleagues to the same effect, and that it was not intended to wreck this Bill? But there is a saying that if one cannot keep a thief out of one's neighbour's garden one may want to keep him, out of one's own.

Mr. Kaufman: One of the delights of reading the hon. Member's speeches in Standing Committee was the stream of aphorisms, which I shall remember and use on suitable occasions.
But some serious arguments have been put by hon. Gentlemen on the third opposition bench below the Gangway, and by my hon. Friends on this side. The hon. Member for Perth and East Perthshire, in moving this series of amendments, asked for categorical assurances that the National Enterprise Board would not operate in the areas north of the border and west of the border, if I may so describe them. I cannot give him those assurances. I cannot give him them for reasons which the Tory Opposition would appreciate but which hon. Members of this Party, the SNP and Plaid Cymru would not accept, namely, that this would wreck the purposes of this Bill.
5.15 p.m.
I know that, despite the separatism which they are elected to advocate in this House, they, and particularly the hon. Member for Caernarvon (Mr. Wigley) do not wish to wreck the purposes of this Bill. In fact, they support many of them, as indeed does the Liberal Party.
But among the purposes of this Bill which would be wrecked by abolishing the activities of the National Enterprise Board in Wales and Scotland would be three of the most important. The first is the restructuring or reorganising of

industries on a United Kingdom basis. The second is the extension of public ownership into profitable areas of manufacturing industry. This is a public ownership Bill, not just a restructuring of industry Bill—the exercise of the State holding company function and the provision of investment capital to companies operating throughout the United Kingdom.
The hon. Member for Aberdeenshire, East (Mr. Henderson) claimed that what we would be doing in this Bill, as he claimed we had done in the case of other nationalised bodies, would be to set up a centralised bureaucratic body which would be unaware of or oblivious to the problems of Scotland. He implied that the nationalised bodies are "big brothers" which ignore the interests of the three other countries of the United Kingdom and, indeed, perhaps the other regions of the United Kingdom. He cited the British Steel Corporation and made certain claims about it.
I point out to the hon. Gentleman that he and his colleagues have never cited the National Coal Board in this connection. The fact is that if it were not for our having a "Great Britain" National Coal Board the coal industry in Scotland would collapse and not be viable. It is the profitable coal areas of England, particularly of South Yorkshire and the East Midlands, which keep the Scottish coal industry and the Welsh coal industry going. This is as it should be, and this is the purpose of a nationally based nationalised body. There are reasons, too, why we need the National Enterprise Board in addition to the SDA and the WDA.

Mr. Gordon Wilson: I do not know whether the Minister is aware—probably not, from his remarks—that it has been the policy of my party for many years to have a Scottish coal board As to his arguments about the viability of the Scottish coalfields and the position of the National Coal Board, is he aware of the reputation of the National Coal Board for blunders and maladministration in Scotland, particularly in the 1950s, when it opened up many new pits and closed many that seemingly were quite efficient, and when the new pits ran into a great deal of trouble? Many of the difficulties which at present afflict the Scottish coal industry came from the maladministration


of that national body, which applied to Scottish miners some of the procedures and techniques which were applicable to different types of seams and mining elsewhere in the United Kingdom.

Mr. Kaufman: I would not claim that the National Coal Board is a perfect body, any more than the SNP or the Tory Party. What I would say is that it cannot be denied—if the hon. Gentleman wants to maintain a separate loss-making Scottish national coal industry, good luck to him—that the Scottish coal industry is viable now as part of a British coal industry, under the National Coal Board.
The hon. Gentleman lives, I say to him in all friendliness, in a world of unreality. He talked, for example, about the national ambitions of Newfoundland, and its separatist ambitions. Newfoundland was a separate member country of the Commonwealth and it found its separatism so unviable that it decided to return and become a province of Canada. Newfoundland is an extremely bad example for him to cite in support of his case.
My hon. Friend the Member for Gateshead, West (Mr. Horam)—who has explained to me why he cannot be present for this part of the debate—made some points which are very valid indeed in the light of what I said in reply to the hon. Member for Henley about the problems of neglected regions of England. In addition to the problems of Scotland and Wales, my own region, the North-West, is a deeply neglected region of England. We shall pay attention to this. In regard to the activities of the National Enterprise Board, we shall, for example, have strong offices of the NEB in both Merseyside and the North-East. What we shall not have is separate agencies of the kind which both Scotland and Wales will have.
Hon. Members who represent the SNP and Plaid Cymru are some of the least naive Members of this House, and they will not wish me to repeat what was said about the powers and the extent of the Welsh Development Agency and the Scottish Development Agency in the course of the Second Reading debates on the Bills last week. I could put them on the record, but they were made clear by my right hon. Friend the Minister of State in the debate on the SDA Bill and by my

hon. Friend the Under-Secretary in the debate on the WDA Bill, and in a guillotined debate it would be wrong to repeat the very lengthy assurances which were given.
All I say is that the remits of the SDA and the WDA will cover many of the matters which the hon. Members wish to do and will not be in conflict with the NEB, which will be able to work in partnership with them.

Sir Raymond Gower: I think that the hon. Gentleman made an involuntary remark which may betray his thinking about these matters. He said that there would not be separate agencies of the NEB in Merseyside and the North-West. Does that mean that he regards the SDA and the WDA merely as agencies?

Mr. Kaufman: No, and I did not say that. They will be separate bodies. They are called agencies, but they will be separate bodies, although working in partnership with the NEB.
As usual, the hon. Member for Dundee, East (Mr. Wilson) made a powerful speech, and I think that my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) answered him amply. The hon. Gentleman asked how we could have a United Kingdom National Enterprise Board which was not answerable in Scotland if it was to be of use to Scotland. The answer is that NEB will be answerable, through my right hon. Friend the Secretary of State, to the House of Commons. There are 107 Scottish and Welsh Members in this House. The few Members who are elected to represent the SNP and Plaid Cymru have shown that they can raise their voices in this House for Scotland and Wales. Those of my hon. Friends who represent Scottish and Welsh constituencies have never left us in doubt about the way in which they can speak on behalf of Scotland and Wales. Therefore, in addition to the answerability of the SDA and the WDA to their respective Cabinet Ministers, the NEB will be answerable through this House to 107 Scottish and Welsh Members.
I take it that we shall now have a Division based upon conviction on the part of the Scottish and Welsh Opposition Members and upon sheer opportunism on the part of Tory Opposition Members.

Mr. Deputy Speaker: Before I put the Question, I must tell the House that I shall allow the customary eight minutes for the first Division. Then we shall return to what Mr. Speaker said earlier. This is because some hon. Members in the Norman Shaw Building may not be

aware of the shortened time for the Division.

Question put, That the amendment be made:—

The House divided: Ayes 217, Noes 240.

Division No. 250.]
AYES
[5.24 p.m.


Adley, Robert
Grylls, Michael
Moore, John (Croydon C)


Aitken, Jonathan
Hall, Sir John
Morris, Michael (Northampton S)


Alison, Michael
Hall-Davis, A. G. F.
Morrison, Charles (Devizes)


Atkins, Rt Hon H. (Spelthorne)
Hamilton, Michael (Salisbury)
Morrison, Hon Peter (Chester)


Awdry, Daniel
Hampson, Dr Keith
Mudd, David


Bain, Mrs Margaret
Hannam, John
Neave, Alrey


Baker, Kenneth
Harvie Anderson, Rt Hon Miss
Nelson, Anthony


Banks, Robert
Hastings, Stephen
Neubert, Michael


Bennett, Dr Reginald (Fareham)
Havers, Sir Michael
Newton, Tony


Benyon, W.
Hawkins, Paul
Normanton, Tom


Berry, Hon Anthony
Heselline, Michael
Nott, John


Biffen, John
Hicks, Hobert
Page, Rt Hon R. Graham (Crosby)


Boscawen, Hon Robert
Holland, Philip
Parkinson, Cecil


Bottomley, Peter
Hooson, Emlyn
Pattie, Geoffrey


Bowden, A. (Brighton, Kemptown)
Hordern, Peter
Percival, Ian


Boyson, Dr Rhodes (Brent)
Howe, Rt Hon Sir Geoffrey
Peyton, Rt Hon John


Braine, Sir Bernard
Howell, David (Guildford)
Pink, R. Bonner


Brittan, Leon
Howell, Ralph (North Norfolk)
Powell, Rt Hon J. Enoch


Brotherton, Michael
Hurd, Douglas
Prior, Rt Hon James


Brown, Sir Edward (Bath)
Hutchison, Michael Clark
Pym, Rt Hon Francis


Bryan, Sir Paul
Irvine, Bryant Godman (Rye)
Rathbone, Tim


Buchanan-Smith, Alick
Irving, Charles (Cheltenham)
Rees, Peter (Dover &amp; Deal)


Buck, Antony
James, David
Rees-Davles, W. R.


Budgen, Nick
Jenkln, Rt Hon P. (Wanst'd &amp; W'df'd)
Reid, George


Bulmer, Esmond
Jessel, Toby
Renton, Rt Hon Sir D. (Hunts)


Butler, Adam (Bosworth)
Jopling, Michael
Ronton, Tim (Mid-Sussex)


Chalker, Mrs Lynda
Kaberry, Sir Donald
Rhys Williams, Sir Brandon


Churchill, w. S.
Kershaw, Anthony
Ridley, Hon Nicholas


Clark, Alan (Plymouth, Sutton)
Kilfedder, James
Ridsdale, Julian


Clark, William (Croydon S)
Kimball, Marcus
Rifkind, Malcolm


Clarke, Kenneth (Rushclifle)
King, Evelyn (South Dorset)
Roberts, Michael (Cardiff NW)


Clegg, Walter
King, Torn (Bridgwater)
Roberts, Wyn (Conway)


Cockcroft, John
Kirk, Petor
Rossi, Hugh (Hornsey)


Cooke, Robert (Bristol W)
Kitson, Sir Timothy
Rost, Peter (SE Derbyshire)


Cope,John
Knight, Mrs Jill
Sainsbury, Tim


Cordle, John H.
Knox, David
Scott, Nicholas


Crawford, Douglas
Lamont, Norman
Shaw, Giles (Pudsey)


Crouch, David
Lane, David
Shelton, William (Stroatham)


Davies, Rt Hon J. (Knutsford)
Langford Holt, Sir John
Shepherd, Colin


Dean, Paul (N Somerset)
Latham, Michael (Melton)
Shersby, Michael


Dodsworth, Geoffrey
Lawrence, Ivan
Sims, Roger


Douglas-Hamilton, Lord James
Lawson, Nigel
Sinclair, Sir George


Drayson, Burnaby
Le Marchant, Spencer
Skeet, T. H. H.


Durant, Tony
Lester, Jim (Beeston)
Smith, Dudley (Warwick)


Dykes, Hugh
Lloyd, Ian
Speed, Keith


Eden, Rt Hon Sir John
Luce, Richard
Spence, John


Edwards, Nicholas (Pembroke)
MacCormick, lain
Spicer, Michael (S Worcester)


Fairbairn, Nicholas
McCrindle, Robert
Sproat, Iain


Fairgrieve, Russell
McCusker, H.
Stainton, Keith


Farr, John
Macfarlane, Neil
Stanbrook, Ivor


Finsberg, Geoffrey
MacGregor, John
Stanley, John


Fisher, Sir Nigel
Macmillan, Rt Hon M. (Farnham)
Steen, Anthony (Wavertree)


Fletcher, Alex (Edinburgh N)
McNair-Wilson, P. (New Forest)
Stewart, Donald (Western Islss)


Fletcher-Cooke, Charles
Made), David
Stewart, Ian (Hitchin)


Fookes, Miss Janet
Marshall, Michael (Arundel)
Stradling Thomas, J.


Fowler, Norman (Sutton C'f'd)
Marten, Neil
Taylor, Teddy (Cathcart)


Fox, Marcus
Mates, Michael
Tebbit, Norman


Fraser, Rt Hon H. (Stafford &amp; St)
Mather, Carol
Temple-Morris, Peter


Gardiner, George (Reigate)
Maudllng, Rt Hon Reginald
Thatcher, Rt Hon Margaret


Gardner, Edward (S Fylde)
Mawby, Ray
Thomas, Rt Hon P. (Hendon S)


Gilmour, Sir John (East Fife)
Maxwell-Hyslop, Robin
Thompson, George


Glyn, Dr Alan
Mayhew, Patrick
Townsend, Cyril D.


Goodhart, Philip
Meyer, Sir Anthony
Trotter, Neville


Goodlad, Alastair
Miller, Hal (Bromsgrove)
Tugendhat, Christopher


Gorst, John
Mills, Peter
Vaughan, Dr Gerard


Gow, Ian (Eastbourne)
Mitchell, David (Basingstoke)
Viggers, Peter


Gower, Sir Raymond (Barry)
Moate, Roger
Wakeham, John


Gray, Hamish
Molyneaux, James
Warren, Kenneth


Griffiths, Eldon
Monro, Hector
Watt, Hamish


Grist, Ian
Montgomery, Fergus
Weatherill, Bernard




Whitelaw, Rt Hon William
Wood, Rt Hon Richard
TELLERS FOR THE AYES:


Wigley, Dafydd
Young, Sir G. (Ealing, Acton)
Mr. Douglas Henderson and


Wilson, Gordon (Dundee E)
Younger, Hon George
Mr. Andrew Welsh.


Winterton, Nicholas






NOES


Allaun, Frank
Garrett, W. E. (Wallsend)
Mulley, Rt Hon Frederick


Archer, Peter
George, Bruce
Murray, Rt Hon Ronald King


Armstrong, Ernest
Gilbert, Dr John
Newens, Stanley


Ashton, Joe
Ginsburg, David
Noble, Mike


Atkins, Ronald (Preston (J)
Golding, John
Oakes, Gordon


Atkinson, Norman
Gourlay, Harry
Ogden, Eric


Bagler, Gordon A. T.
Graham, Ted
O'Halloran, Michael


Barnett, Guy (Greenwich)
Grant, George (Morpeth)
O'Malley, Rt Hon Brian


Barnett, Rt Hon Joel (Heywood)
Grant, John (Islington C)
Orme, Rt Hon Stanley


Bates, Alf
Grimond, Rt Hon J.
Ovenden, John


Bean, R. E.
Grocott, Bruce
Palmer, Arthur


Beith, A. J.
Hamilton, James (Bothwell)
Park, George


Bennett, Andrew (Stockport N)
Hamilton, W. W. (Central Fife)
Parker, John


Blenkinsop, Arthur
Hardy, Peter
Pavitt, Laurie


Boardman, H.
Harrison, Walter (Wakefield)
Penhaligon, David


Booth, Albert
Hart, Rt Hon Judith
Phipps, Dr Colin


Boothroyd, Miss Betty
Hatton, Frank
Prescott, John


Bottomley, Rt Hon Arthur
Hayman, Mrs Helene
Price, William (Rugby)


Boyden, James (Bish Auck)
Hooley, Frank
Radice, Giles


Bray, Dr Jeremy
Horam, John
Richardson, Miss Jo


Brown, Hugh D. (Provan)
Howell, Denis (B'ham, Sm H)
Roberts, Albert (Normanton)


Brown, Robert C. (Newcastle W)
Hoyle, Doug (Nelson)
Roberts, Gwilym (Cannock)


Buchan, Norman
Huckfield, Les
Roderick, Caerwyn


Buchanan, Richard
Hughes, Mark (Durham)
Rodgers, George (Chorley)


Callaghan, Rt Hon J. (Cardiff SE)
Hughes, Robert (Aberdeen N)
Rodgers, William (Stockton)


Callaghan, Jim (Middleton &amp; P)
Hughes, Roy (Newport)
Rooker, J. W.


Campbell, Ian
Hunter, Adam
Ross, Stephen (Isle of Wight)


Canavan, Dennis
Irvine, Rt Hon Sir A. (Edge Hill)
Ross, Rt Hon W. (Kilmarnock)


Carmichael, Neil
Irving, Rt Hon S. (Dartford)
Rowlands, Ted


Cartwright, John
Jackson, Miss Margaret (Lincoln)
Ryman, John


Castle, Rt Hon Barbara
Janner, Greville
Sandelson, Neville


Clemitson, Ivor
Jay, Rt Hon Douglas
Sedgemore, Brian


Cocks, Michael (Bristol S)
Jenkins, Rt Hon Roy (Stechford)
Selby, Harry


Cohen, Stanley
John, Brynmor
Shaw, Arnold (Ilford South)


Coleman, Donald
Johnson, James (Hull West)
Sheldon, Robert (Ashton-u-Lyne)


Conlan, Bernard
Johnson, Walter (Derby S)
Short, Rt Hon E. (Newcastle C)


Cook, Robin F. (Edin C)
Jones, Alec (Rhondda)
Short, Mrs Renée (Wolv NE)


Corbett, Robin
Jones, Barry (East Flint)
Silkin, Rt Hon John (Deptford)


Cox, Thomas (Tooting)
Jones. Dan (Burnley)
Silkin, Rt Hon S. C. (Dulwich)


Craigen, J. M. (Maryhill)
Kaufman, Gerald
Sillars, James


Crawshaw, Richard
Kelley, Richard
Silverman, Julius


Cronin, John
Kerr, Russell
Skinner, Dennis


Crosland, Rt Hon Anthony
Kilroy-Sllk, Robert
Small, William


Cryer, Bob
Kinnock, Neil
Smith, Cyril (Rochdale)


Cunningham, G. (Islington S)
Lambie, David
Smith, John (N Lanarkshire)


Cunningham, Dr J. (Whiteh)
Lamborn, Harry
Spearing, Nigel


Dalyell, Tam
Lamond, James
Spriggs, Leslie


Davidson, Arthur
Leadbitter, Ted
Stallard, A. W.


Davies, Bryan (Enfield N)
Lewis, Ron (Carlisle)
Steel, David (Roxburgh)


Davies, Denzil (Llanelll)
Lipton, Marcus
Stoddart, David


Davis, Clinton (Hackney C)
Litterick, Tom
Stott, Roger


Deakins, Eric
Lomas, Kenneth
Strang, Gavin


Dean, Joseph (Leeds W)
Loyden, Eddie
Strauss, Rt Hon G. R.


de Freitas, Rt Hon Sir Geoffrey
Luard, Evan
Taylor, Mrs Arm (Bolton W)


Dempsey, James
Lyon, Alexander (York)
Taylor, R. (Croydon NW)


Doig, Peter
McCartney, Hugh
Thomas, Jeffrey (Abertillery)


Dormand, J. D.
McElhone, Frank
Thomas, Mike (Newcastle E)


Douglas-Mann, Bruce
MacFarquhar, Roderick
Thomas, Ron (Bristol NW)


Duffy, A. E. P.
McGuire, Michael (Ince)
Thorne, Stan (Preston South)


Dunn, James A.
Mackenzie, Gregor
Tinn, James


Dunnett, Jack
Mackintosh, John P.
Tomilnson, John


Dunwoody, Mrs Gwyneth
McMillan, Tom (Glasgow C)
Tomney, Frank


Edelman, Maurice
McNamara, Kevin
Torney, Tom


Edge, Geoff
Madden, Max
Tuck, Raphael


Ellis, Tom (Wrexham)
Mallalieu, J. P. W.
Urwin, T. W.


English, Michael
Marks, Kenneth
Varley, Rt Hon Eric G.


Evans, Ioan (Aberdare)
Marquand, David
Wainwrlght, Edwin (Deame V)


Evans, John (Newton)
Marshall, Dr Edmund (Goole)
Wainwright, Richard (Coine V)


Ewing, Harry (Stirling)
Marshall, Jim (Leicester S)
Walden, Brian (B'ham, L'dyw'd)


Fernyhough, Rt Hon E.
Mason, Rt Hon Roy
Walker, Harold (Doncaster)


Fitch, Alan (Wigan)
Maynard, Miss Joan
Ward, Michael


Flannery, Martin
Meillsh, Rt Hon Robert
Watkinson, John


Fletcher, Ted (Darlington)
Mikardo, Ian
Weitzman, David


Foot, Rt Hon Michael
Millan, Bruce
Wellbeloved, James


Fowler, Gerald (The Wrekin)
Miller, Dr M. S. (E Kilbride)
White, Frank R. (Bury)


Fraser, John (Lambeth, N'w'd)
Molloy, William
Whitlock, William


Garrett, John (Norwich S)
Morris, Alfred (Wythenshawe)
Williams, Alan (Swansea W)







Williams, Alan Lee (Hornch'ch)
Wise, Mrs Audrey



Williams, Rt Hon Shirley (Hertford)
Woodall, Alec
TELLERS FOR THE NOES:


Williams, W. T. (Warrington)
Woof, Robert
Mr. John Ellis and


Wilson, Alexander (Hamilton)
Wrigglesworth, Ian
Mr. Joseph Harper.


Wilson, William (Coventry SE)
Young, David (Bolton E)

Question accordingly negatived.

Mr. Tom King: I beg to move Amendment No. 1, in page 1, line 13, at end insert:
'( ) The members of the Board shall be appointed from among persons who appear to the Secretary of State to have wide experience of, and to have shown capacity in, industry, technology, commercial or financial matters, administration, or the organisation of workers'.
This amendment can be moved briefly. The Under-Secretary has studied the proceedings in Committee and will be aware that this amendment merely inserts in the Bill the provision that the Government intended to have in it. It would ensure that the members of the National Enterprise Board—and the Government never cease to tell us what an important job this board will do—have some qualifications. The amendment makes it clear that:
The members of the Board shall be appointed from among persons who appear to the Secretary of State to have wide experience of, and to have shown capacity in, industry, technology, commercial or financial matters, administration, or the organisation of workers'.
The matter arose in Committee, when an amendment was proposed by the Under-Secretary's hon. Friends below the Gangway—if I can so describe their position in Committee—and at the first whiff of grapeshot the Government, in the shape of the former Minister of State, the hon. Member for Liverpool, Walton (Mr. Heller), collapsed. Without any explanation to the Committee as to why this provision had been thought necessary in the first place, he calmly said that he would accept the amendment. He took advantage of a situation in which we had made it clear that we were not happy about the clause because we would prefer to have seen it tightened. However, we did not wish to see all question of qualifications removed.
If this were a consistent policy on the part of the Government, we could understand it. However, since then they have introduced the Welsh Development Agency Bill and the Scottish Develop-

ment Agency Bill. We would assume that if it were Government policy to require no qualifications to be inserted, they would not appear in the Bill either. However, what do we find? In the Scottish Development Agency Bill we find that:
The members…shall be appointed from among persons who appear to the Secretary of State to have a wide experience of…".
The Welsh Development Agency Bill states:
The members of the Agency shall include persons who appear to the Secretary of State to have wide experience of…".
Then it gives a similar range of qualifications.
I need not labour the point, because I trust that the Minister will accept it. This was the Government's original intention. They were in rather a difficult situation and were unsure of some of the Members on the Committee at that time. I hope that they are now more confident and recognise the need for this provision.
At the time the Minister of State made passing references to the Gas Act and the Post Office Act. However, those are single-purpose institutions. In both the Scottish Development Agency and the Welsh Development Agency and in the NEB we deal with multi-disciplinary and multi-purpose activities, as we did in the former IRC. It is in that range that the qualifications peed to be spelt out.
The House will knows that there was enough uncertainty over the Bill and the intentions of the then Secretary of State for Parliament to be far from happy to leave to any Secretary of State totally unfettered powers to appoint anyone he chooses. The powers of political patronage in this area—to appoint people without any qualifications—are obviously unacceptable. It is for that reason that we hope the Government will accept our support to reinstate their original intention in the Bill. The wording is identical to that which they had in their own Bill, and we believe that those qualifications should be included.

Mr. Tim Renton: I rise to support the amendment moved by my hon. Friend the Member for Bridgwater (Mr. King).
One of the strange things about this ill-conceived and misbegotten Bill to set up the National Enterprise Board is the way in which the qualifications clause disappeared in Committee—not with a bang and not even with a whimper from the Government. Therefore, we wondered why the provision was ever included in the first place if the Government considered that it was not necessary for members of this important board to have any qualifications whatever.
From the proceedings of the second Sitting of the Committee one finds that the qualifications were dropped because of pressure from the Tribune Group. The Government were frightened that the amendment might be carried against their wishes, so they caved in. The main argument advanced by the hon. Member for Norwich, South (Mr. Garrett) in moving that the qualifications clause should disappear was that if the qualifications stayed in the Bill, behavioural scientists would be excluded. He laid great stress on that, but it is not an adequate reason for removing the qualifications clause. As the hon. Member for Norwich, South was so worried about behavioural scientists, I hesitate to ask whether he is a behavioural scientist. In any case, I should have thought that a behavioural scientist would be covered by the description "technology" as a person versed in technology.
We are deeply opposed to the principle of the NEB but, if it is to come into being, it will act as a multifarious holding company, as has been said by many Ministers who have been concerned with the Bill. Our more substantial argument is that if the NEB is to be successful, surely the chairman of the board will need to have members of the board with many skills to support him. The Government should therefore have the courage to stand up against the omission of behavioural scientists, to risk the wrath of the hon. Member for Norwich, South, and to restore the original qualifications so that the chairman shall be able to call on fully-qualified people to help him to administer this conglomerate which the Government intend to create.

Mr. Giles Shaw: In endorsing the remarks made by my hon. Friends I draw to the attention of the House that one of the major objectives of the National Enterprise Board, as the Secretary of State said several times in Committee, is to restore the confidence of industry. We have made clear our view that we hardly believe that industry will be confident in the operations of the NEB. To put the least value on it, it would be a vital ingredient of such confidence that the persons appointed to the board should be of proven worth and value in the professions listed in the amendment.
We are here faced with the possibility that no qualification will be required to enable a person to become a member of the NEB. In Committee we saw farce upon farce attending the passage of the Bill. When one of the longer running Whitehall farces eventually closed after a run of forty sittings to cries of "Author, Author", we were treated to a fusillade of shots from Downing Street when we attempted to find out what had happened to the previous author. I hope that we shall get a slightly more complimentary reply on the question who should compose the NEB than a discreet rolling down of the safety curtain. According to the Government, it does not matter, but we on the Opposition benches think that it matters a great deal that the people who are meant to be in charge of the enterprise should at least have the background of knowing that they have the confidence of industry in their talents.

Dr. Reginald Bennett: As one who has not had the privilege of serving on the Committee, I am interested to hear the controversy on this subject, particularly in relation to behavioural scientists. I have humble qualifications in psychiatry, but I must admit that I have never heard of behavioural scientists. Is a behavioural scientist someone who discusses the behaviour of scientists, because it is often political or eccentric, or is he a scientist who, not being psychiatrically trained or even psychologically trained, studies the behaviour of animals or the human species?
If that is the issue, I should be grateful if the Minister would give us a definition


and tell us why alarm on behalf of behavioural scientists should rule out from any qualifications all future members of the board and preclude them from having any form of technical knowledge which might increase the confidence of this country and other countries in the board at a time when, as today has shown, confidence in the country needs to be stimulated.

5.45 p.m.

Mr. Kaufman: During this Report stage it will fall to me to request the House to reject amendments which were made in Committee, and I have no doubt that there will be a display of artificial wrath from Opposition Members who will say that we are spurning decisions made in Committee. On this occasion we ask the House to abide by a decision taken in Committee. It is right that decisions made in Committee should be accepted, except when there are strong reasons for their being reversed on Report. The speeches we have heard do not amount to strong reasons.
My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) in one of a series of extremely compelling speeches in Committee, both as Minister of State and after he ceased to be Minister of State, gave good reasons why the Government should accept the amendment which was made in Committee. The arguments put forward by the hon. Member for Bridgwater (Mr. King) do not compare with those put forward by my hon. Friend. For example, the hon. Member for Bridgwater dismissed the precedents of the Civil Aviation Act 1971 and the Gas Act 1972—both Conservative Acts—which we are following as a result of the amendment which was accepted in Committee.
The hon. Member for Bridgwater cited Clause 1(4) of the Scottish Development Agency Bill as a reason for showing that the Government were being inconsistent in not accepting his amendment, but he significantly failed to read the entire relevant extract from that subsection He quoted the first part of subsection (4):
The members of the Agency shall be appointed from among persons who appear to the Secretary of State to have a wide experience of, and to have shown capacity in, industry".

Then his voice died away and he did not go on to read the following words which are:
banking, accounting or finance, environmental matters, local government or the representation of workers, or any other field of activity which the Secretary of State considers is relevant to the discharge of the functions of the Agency.
That subsection gives to my right hon. Friend the Secretary of State for Scotland in respect of the Scottish Development Agency no greater and no less licence than that which my right hon. Friend the Secretary of State for Industry is given by the Bill as amended in Committee. This is a distinction without a great difference.

Mr. Tim Renton: Will not the hon. Gentleman accept that the function of the NEB is multipurpose? Therefore the analogy between the NEB and, for example, the Civil Aviation Act and the Post Office Act is totally irrelevant because the boards set up under those Acts were for a simple, straightforward monolithic purpose. Beyond that, the hon. Member for Liverpool, Walton (Mr. Heifer) advanced no reason for removing the qualifications from the Bill. He said that he would accept the amendment so as not to make the Bill too restrictive.

Mr. Kaufman: From my relatively short experience in the House, I have learnt that the analogies one makes oneself are relevant and that the analogies of Opposition Members are irrelevant. That is what the hon. Member for mid-Sussex (Mr. Renton) is saying.
I have had the great advantage of having read the entire proceedings of the 40 Sittings in Committee, which is rather like reading "War and Peace" three times over. To have read the proceedings is slightly more advantageous than to have attended the Committee. Many hon. Members do not seem to have been there a great deal, as I note that the Committee lost its quorum from time to time. The hon. Member for Tonbridge and Mailing (Mr. Stanley) had a strange capacity to empty the Committee whenever he rose to speak, as he had to admit from time to time. It was not the occasional organised absenteeism of my hon. Friends that accounted for the lack of a full attendance from time to time.
As I recall from reading the Official Report of the Standing Committee proceedings, the suggestions of additional qualifications for members of the NEB were so numerous that to embody them all would have been to lengthen the Bill extravagantly. It was sensibly felt that in this almost unique case it was better to follow the admirable precedents of the Conservative Government in 1971 and 1972 and to remove the subsection.
We seem to be having a great deal of huffing and puffing over very little, in view of the extremely irrelevant analogy quoted by the hon. Member for Bridgwater. I ask the House to reject the amendment.

Mr. Tom King: We have now had another speech from a Minister very similar to that made by the hon. Member for Liverpool, Walton (Mr. Heifer), giving no explanation why that subsection was in the Bill in the first place. That point has never been answered. I shall gladly give way to the Minister if from the speech by his hon. Friend that he found so compelling he can give me one compelling sentence to show why it was included, and why it is now better to delete it.
The hon. Gentleman said that the Government preferred to rest on the precedents of Conservative Acts. My hon. Friend the Member for Mid-Sussex (Mr. Renton) has already made the point, as I tried to do, that they concerned single-purpose activities—the Post Office, civil aviation, the gas corporation. The Government have not rested on those precedents. They have already gone beyond them with the Scottish Development Agency and the Welsh Development Agency. The Minister accused me of not reading the whole sentence in connection with the Scottish Development Agency. It is true that it goes on to include
any other field of activity which the Secretary of State considers is relevant".
But the hon. Gentleman chose not to read the WDA sentence, because that does not have that wording. The WDA Bill merely refers to:
administration, local government and matters relating to the environment.

I am not clear what the reasons are for precise qualifications. The SDA has a rather looser final subsection. At present the NEB requires no qualifications what-soever. The Government have given no explanation why they put the provision in originally.
It is no good the Government standing on the argument that it was done in Committee, because the hon. Member for Liverpool, Walton gave us no explanation in Committee. Presumably the Government thought the Bill out and thought it right for the qualifications to be included—sufficiently right to continue to include them in the SDA and WDA Bills. It will not do to go back to an Act of 1971 and to say that that is the explanation. That has already been superseded by the Government's actions in two subsequent Bills. The Government are convicted of total inconsistency.
Worse than that, the Minister knows that there is concern in industry about the way in which the NEB may be operated—the standard of operation, the sort of people who may become involved in it. Not much more than two hours ago, we heard the Chancellor of the Exchequer, who faces a grave economic situation. One of the messages that came across loud and clear was that there must be confidence in industry if there is to be progress, if there is to be investment.
Here is an easy opportunity for the Government to recognise the concern of industry on a matter which arouses only fairly minor opposition from the Left wing of the hon. Gentleman's party. The Minister gave it away by saying that he sees this as huffing and puffing about what is not a major point. But it gives the Government their first opportunity in the Bill to show that they intend to recognise the interests and concern of both sides of industry.
The Government could make a gesture towards trying to re-establish confidence. Industry and the country will know that, on what the Minister admits is a minor matter, the Government decline to take that opportunity. For those reasons, we shall vote for the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 215, Noes 238.

Division No. 251.]
AYES
[5.55 p.m.


Adley, Robert
Hamilton, Michael (Salisbury)
Nott, John


Aitken, Jonathan
Hampson, Dr Keith
Page, Rt Hon R. Graham (Crosby)


Alison, Michael
Hannam, John
Parkinson, Cecil


Atkins, Rt Hon H. (Spelthorne)
Harvie Anderson, Rt Hon Miss
Pattie, Geoffrey


Awdry, Daniel
Hastings, Stephen
Percival, Ian


Bain, Mrs Margaret
Havers, Sir Michael
Peyton, Rt Hon John


Baker, Kenneth
Hawkins, Paul
Pink, R. Bonner


Banks, Robert
Henderson, Douglas
Powell, Rt Hon J. Enoch


Bennett, Dr Reginald (Fareham)
Heseltine, Michael
Prior, Rt Hon James


Benyon, W.
Hicks, Robert
Pym, Rt Hon Francis


Berry, Hon Anthony
Holland, Philip
Rathbone, Tim


Biffen, John
Hordern, Peter
Rawlinson, Rt Hon Sir Peter


Boscawen, Hon Robert
Howe, Rt Hon Sir Geoffrey
Rees, Peter (Dover &amp; Deal)


Bottomley, Peter
Howell, David (Guildford)
Rees-Davies, W. R.


Bowden, A. (Brighton, Kemptown)
Howell, Ralph (North Norfolk)
Reid, George


Boyson, Dr Rhodes (Brent)
Hurd, Douglas
Renton, Rt Hon Sir D. (Hunts)


Braine, Sir Bernard
Hutchison, Michael Clark
Renton, Tim (Mid-Sussex)


Brittan, Leon
Irvine, Bryant Godman (Rye)
Rhys Williams, Sir Brandon


Brotherton, Michael
Irving, Charles (Cheltenham)
Ridley, Hon Nicholas


Brown, Sir Edward (Bath)
James, David
Ridsdale, Julian


Bryan, Sir Paul
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Rifkind, Malcolm


Buchanan-Smith, Alick
Jessel, Toby
Roberts, Michael (Cardiff NW)


Buck, Antony
Jopling, Michael
Roberts, Wyn (Conway)


Budgen, Nick
Kaberry, Sir Donald
Rossi, Hugh (Hornsey)


Bulmer, Esmond
Kershaw, Anthony
Rost, Peter (SE Derbyshire)


Butler, Adam (Bosworth)
King, Evelyn (South Dorset)
Sainsbury, Tim


Chalker, Mrs Lynda
King, Tom (Bridgwater)
Scott, Nicholas


Churchill, W. S.
Kirk, Peter
Shaw, Giles (Pudsey)


Clark, Alan (Plymouth, Sutton)
Knight, Mrs Jill
Shelton, William (Streatham)


Clark, William (Croydon S)
Knox, David
Shepherd, Colin


Clarke, Kenneth (Rushcliffe)
Lamont, Norman
Shersby, Michael


Clegg, Walter
Lane, David
Sims, Roger


Cockcroft, John
Langford-Holt, Sir John
Sinclair, Sir George


Cooke, Robert (Bristol W)
Latham, Michael (Melton)
Skeet, T. H. H.


Cope, John
Lawrence, Ivan
Smith, Dudley (Warwick)


Cordle, John H.
Lawson, Nigel
Speed, Keith


Crawford, Douglas
Lester, Jim (Beeston)
Spence, John


Crouch, David
Lloyd, Ian
Spicer, Michael (S Worcester)


Crowder, F. P.
MacCormick, Iain
Sproat, Iain


Davies, Rt Hon J. (Knutsford)
McCrindle, Robert
Stainton, Keith


Dean, Paul (N Somerset)
McCusker, H.
Stanbrook, Ivor


Dodsworth, Geoffrey
Macfarlane, Neil
Stanley, John


Douglas-Hamilton, Lord James
MacGregor, John
Steen, Anthony (Wavertree)


Drayson, Burnaby
Macmillan, Rt Hon M. (Farnham)
Stewart, Donald (Western Isles)


Durant, Tony
McNair-Wilson, P. (New Forest)
Stewart, Ian (Hitchin)


Dykes, Hugh
Madel, David
Stradling Thomas, J.


Eden, Rt Hon Sir John
Marshall, Michael (Arundel)
Taylor, Teddy (Cathcart)


Edwards, Nicholas (Pembroke)
Marten, Nell
Tebbit, Norman


Fairbairn, Nicholas
Mates, Michael
Temple-Morris, Peter


Fairgrieve, Russell
Mather, Carol
Thatcher, Rt Hon Margaret


Farr, John
Maudling, Rt Hon Reginald
Thomas, Rt Hon P. (Hendon S)


Finsberg, Geoffrey
Mawby, Ray
Thompson, George


Fisher, Sir Nigel
Maxwell-Hyslop, Robin
Townsend, Cyril D.


Fletcher, Alex (Edinburgh N)
Mayhew, Patrick
Trotter, Neville


Fletcher-Cooke, Charles
Meyer, Sir Anthony
Tugendhat, Christopher


Fookes, Miss Janet
Miller, Hal (Bromtgrove)
Vaughan, Dr Gerard


Fowler, Norman (Sutton C'f'd)
Mills, Peter
Viggers, Peter


Fox, Marcus
Miscampbell, Norman
Wakeham, John


Fraser, Rt Hon H. (Stafford &amp; St)
Mitchell, David (Basingstoke)
Warren, Kenneth


Gardiner, George (Reigate)
Moate, Roger
Watt, Hamish


Gardner, Edward (S Fylde)
Molyneaux, James
Weatherill, Bernard


Gilmour, Sir John (East Fife)
Monro, Hector
Welsh, Andrew


Glyn, Dr Alan
Montgomery, Fergus
Whitelaw, Rt Hon William


Goodhart, Philip
Moore, John (Croydon C)
Wigley, Dafydd


Goodlad, Alastair
Morris, Michael (Northampton S)
Wilson, Gordon (Dundee E)


Gorst, John
Morrison, Charles (Devizes)
Winterton, Nicholas


Gow, Ian (Eastbourne)
Morrison, Hon Peter (Chester)
Wood, Rt Hon Richard


Gower, Sir Raymond (Barry)
Mudd, David
Young, Sir G. (Ealing, Acton)


Gray, Hamish
Neave, Airey
Younger, Hon George


Grist, Ian
Nelson, Anthony



Grylls, Michael
Neubert, Michael
TELLERS FOR THE AYES:


Hall, Sir John
Newton, Tony
Mr. Spencer Le Marchant and


Hall-Davis, A. G. F.
Normanton, Tom
Mr. Richard Luce.




NOES


Allaun, Frank
Golding, John
Palmer, Arthur


Anderson, Donald
Gourlay, Harry
Park, George


Archer, Peter
Graham, Ted
Parker, John


Armstrong, Ernest
Grant, George (Morpeth)
Pavitt, Laurie


Ashton, Joe
Grant, John (Islington C)
Penhaligon, David


Atkins, Ronald (Preston N)
Grimond, Rt Hon J.
Phipps, Dr Colin


Atkinson, Norman
Grocott, Bruce
Prescott, John


Bagier, Gordon A. T.
Hamilton, James (Bothwell)
Price, C. (Lewisham W)


Barnett, Guy (Greenwich)
Hamilton, W. W. (Central Fife)
Price, William (Rugby)


Barnett, Rt Hon Joel (Heywood)
Hardy, Peter
Radice, Giles


Bates, Alf
Harrison, Walter (Wakefield)
Richardson, Miss Jo


Bean, R. E.
Hart, Rt Hon Judith
Roberts, Albert (Normanton)


Beith, A. J.
Hatton, Frank
Roberts, Gwilym (Cannock)


Bennett, Andrew (Stockport N)
Hayman, Mrs Helene
Roderick, Caerwyn


Blenkinsop, Arthur
Hooley, Frank
Rodgers, George (Chorley)


Boardman, H.
Horam, John
Rodgers. William (Stockton)


Booth, Albert
Howell, Denis (B'ham, Sm H)
Rooker, J. W.


Boothroyd, Miss Betty
Hoyle, Doug (Nelson)
Ross, Stephen (Isle of Wight)


Bottomley, Rt Hon Arthur
Huckfield, Les
Ross, Rt Hon W. (Kilmarnock)


Boyden, James (Bish Auck)
Hughes, Mark (Durham)
Rowlands, Ted


Bray, Dr Jeremy
Hughes, Robert (Aberdeen N)
Ryman, John


Brown, Hugh D. (Provan)
Hughes, Roy (Newport)
Sandelson, Neville


Brown, Robert C. (Newcastle W)
Hunter, Adam
Sedgemore, Brian


Buchan, Norman
Irvine, Rt Hon Sir A. (Edge Hill)
Selby, Harry


Buchanan, Richard
Irving, Rt Hon S. (Dartford)
Shaw, Arnold (Ilford South)


Callaghan, Rt Hon J. (Cardiff SE)
Jay, Rt Hon Douglas
Sheldon, Robert (Ashton-u-Lyne)


Callaghan, Jim (Middleton &amp; P)
Jenkins, Rt Hon Roy (Stechford)
Short, Rt Hon E. (Newcastle C)


Campbell, Ian
John, Brynmor
Short, Mrs Renée (Wolv NE)


Canavan, Dennis
Johnson, James (Hull West)
Silkin, Rt Hon John (Deptford)


Carmichael, Neil
Johnson, Walter (Derby S)
Silkin, Rt Hon S. C. (Dulwich)


Cartwright, John
Jones, Alec (Rhondda)
Sillars, James


Castle, Rt Hon Barbara
Jones, Barry (East Flint)
Silverman, Julius


Clemitson, Ivor
Jones, Dan (Burnley)
Skinner, Dennis


Cocks, Michael (Bristol S)
Kaufman, Gerald
Small, William


Cohen, Stanley
Kelley, Richard
Smith, Cyril (Rochdale)


Coleman, Donald
Kerr, Russell
Smith, John (N Lanarkshire)


Conlan, Bernard
Kilroy-Silk, Robert
Spearing, Nigel


Cook, Robin F. (Edin C)
Kinnock, Neil
Spriggs, Leslie


Corbett, Robin
Lambie, David
Stallard, A. W.


Cox, Thomas (Tooting)
Lamborn, Harry
Steel, David (Roxburgh)


Craigen. J. M. (Maryhill)
Lamond, James
Stoddart, David


Crawshaw, Richard
Leadbitter, Ted
Stott, Roger


Crosland, Rt Hon Anthony
Lewis, Ron (Carlisle)
Strang, Gavin


Cryer, Bob
Lipton, Marcus
Taylor, Mrs Ann (Bolton W)


Cunningham, G. (Islington S)
Litterick, Tom
Thomas, Jeffrey (Abertillery)


Cunningham, Dr J. (Whiteh)
Lomas, Kenneth
Thomas, Mike (Newcastle E)


Dalyell, Tam
Loyden, Eddie
Thomas, Ron (Bristol NW)


Davidson, Arthur
Luard, Evan
Thorne, Stan (Preston South)


Davies, Bryan (Enfield N)
McCartney, Hugh
Tinn, James


Davies, Denzil (Llanelli)
McElhone, Frank
Tomlinson, John


Davis, Clinton (Hackney C)
MacFarquhar, Roderick
Tomney, Frank


Deakins, Eric
McGuire, Michael (Ince)
Torney, Tom


Dean Joseph (Leeds W)
Mackenzie, Gregor
Tuck, Raphael


de Freitas, Rt Hon Sir Geoffrey
Mackintosh, John P.
Urwin, T. W.


Dempsey, James
McMillan, Tom (Glasgow C)
Varley, Rt Hon Eric G.


Doig, Peter
McNamara, Kevin
Wainwright, Edwin (Dearne V)


Dormand, J. D.
Madden, Max
Wainwright, Richard (Colne V)


Douglas-Mann, Bruce
Mallalieu, J. P. W.
Walden, Brian (B'ham, L'dyw'd)


Duffy, A. E. P.
Marks, Kenneth
Walker, Harold (Doncaster)


Dunn, James A.
Marquand, David
Ward, Michael


Dunnett, Jack
Marshall, Dr Edmund (Goole)
Watkinson, John


Dunwoody, Mrs Gwyneth
Marshall, Jim (Leicester S)
Weitzman, David


Edge, Geoff
Mason, Rt Hon Roy
Wellbeloved, James


Ellis, John (Brlgg &amp; Scun)
Maynard, Miss Joan
White, Frank R. (Bury)


Ellis, Tom (Wrexham)
Mellish, Rt Hon Robert
Whitlock, William


English, Michael
Mikardo, Ian
Williams, Alan (Swansea W)


Evans, loan (Aberdare)
Millan, Bruce
Williams, Alan Lee (Hornch'ch)


Evans, John (Newton)
Miller, Dr M. S. (E Kilbride)
Williams, Rt Hon Shirley (Hertford)


Ewing, Harry (Stirling)
Molloy, William
Williams, W. T. (Warrington)


Fernyhough, Rt Hon E.
Morris, Alfred (Wythenshawe)
Wilson, Alexander (Hamilton)


Fitch, Alan (Wigan)
Morris, Charles R. (Openshaw)
Wilson, William (Coventry SE)


Flannery, Martin
Mulley, Rt Hon Frederick
Wise, Mrs Audrey


Fletcher, Ted (Darlington)
Murray, Rt Hon Ronald King
Woodall, Alec


Foot, Rt Hon Michael
Newens, Stanley
Woof, Robert


Fowler, Gerald (The Wrekln)
Noble, Mike
Wrigglesworth, Ian


Fraser, John (Lambeth, N'w'd)
Oakes, Gordon
Young, David (Bolton E)


Garrett, John (Norwich S)
Ogden, Eric



Garrett, W. E. (Wallsend)
O'Halloran, Michael
TELLERS FOR THE NOES:


George, Bruce
O'Malley, Rt Hon Brian
Mr. Colin Jackson and


Gilbert, Dr John
Orme, Rt Hon Stanley
Mr. Joseph Harper.


Ginsburg, David
Ovenden, John

Question accordingly negatived.

Mr. Kaufman: I beg to move, Amendment No. 2, in page 2, line 9, leave out
'the servant or agent of the Crown'
and insert
'performing any function or exercising any powers (including powers under section 3 below), whether by direction of the Secretary of State or otherwise, as the servant or agent of the Crown or any government department,'.
This amendment is intended to make it clear that in no respect is the NEB to be regarded as the servant or agent of the Crown.
The provision ensures that when the board gives assistance under Clause 3 it will do so in its own name. Therefore, if any dispute arises it will be the responsibility of the NEB to deal with it itself and not the Secretary of State's. This ensures that the NEB will have every incentive to act efficiently when it acts as a channel of assistance.

Mr. Tom King: In Committee we discused the rôle of the Parliamentary Commissioner for Administration, and particularly in relation to directives from the Secretary of State under Clause 3 to exercise powers under Sections 7 and 8 of the Industry Act 1972. Will the Bill put the use of those powers outside the scope of the Parliamentary Commissioner, where at present it remains? Does the amendment in any way affect that position? It would appear that there is a subsequent Government amendment to make it clear that the Secretary of State will remain liable for any exercise of Section 7 and Section 8 powers—albeit by the NEB, but the liability still rests with him—and therefore, any submission to the Parliamentary Commissioner would still be within his scope.

Mr. Kaufman: It is appropriate to clarify this matter, on which there was a good deal of confusion in Committee. The amendment clarifies the point that the board is not acting as the agent of the Secretary of State when providing financial assistance under Clause 3, and it is therefore not subject to investigation by the Parliamentary Commissioner for Administration. The Secretary of State's responsibility in giving directions will, however, be fully subject to investigation and the NEB could be required to furnish any information or documents relevant to

the PCA's investigation of the Department.

Amendment agreed to.

Mr. Cyril Smith: I beg to move, Amendment No. 173, in page 2, line 15, insert—
'(9) The Board shall maintain a register of members' financial interests and shall ensure that all members of the Board enter statements of such of their financial interests as, were they Members of the House of Commons, they would be required to register in accordance with resolutions of that House'.
While I have little sympathy with the Bill as a whole and believe that investment, about which we heard a great deal during Question Time this afternoon, would be improved by the Bill being jettisoned, nevertheless if we are to have the Bill we have to ensure that it is amended in a way that at least makes it credible, and certainly gives to the public as a whole the appearance—if I may use one of my own phrases—of everything being straight and above board. What we are talking about in this amendment is not unrelated to the question of investment in the sense that it raises the issue of public confidence.
The Minister will be aware that when this subject was discussed in Committee there was a great deal of support from hon. Members for the amendment moved by my hon. Friend the Member for Colne Valley (Mr. Wainwright) which was closely similar to that which I am now moving. The aim that he then sought to achieve, namely, the public declaration of interest by members of the proposed National Enterprise Board, was supported in principle by the hon. Members for Bethnal Green and Bow (Mr. Mikardo), for Nelson and Colne (Mr. Hoyle), for Sudbury and Woodbridge (Mr. Stainton) and others.
The Minister dealing with the Bill at that time, the hon. Member for Oldham, West (Mr. Meacher), gave an undertaking, as reported in c. 155 of the OFFICIAL REPORT of the Committee proceedings of 11th March, to which I would draw the Minister's attention, that the Government would return to this matter. The first thing I would like to know is what has happened to that promise? Why have not the Government put down an amendment to their own Bill in accordance with the promise given by the Minister, namely, that the Government


would return to this matter—not that they would consider the matter and then decide whether to return to it.
In the last couple of hours I have read the whole of the Committee proceedings of that day and the Minister quite clearly said the Government had a great deal of sympathy with the amendment and would return to the matter. They have not done so. I would like to know whether that promise is like so many of the promises of the present Government. Is it a promise that they will do something that they will then do nothing about? Last week hon. Members opposite were all trooping into the Lobby to vote against a prices and incomes policy. This week we are to have a prices and incomes policy although there may be a difference of opinion on the form that it will take. We are quite used to the Government saying one thing one week and another thing the next. We are entitled to know why the Government should have promised to return to this matter and have not done so.
In thinking not only of this but of other events it appears that what the Liberals said yesterday the Government believe today and act upon tomorrow, but in this matter we shall be very happy to accommodate the Government in the hope that they will accept the amendment now before the House.
There can be no doubt that members of the National Enterprise Board will be very much on a par with Members of this House. They will take decisions that vitally affect the future of British industry. In the course of taking those decisions they will be spending public money to implement them. We believe, therefore, that it is right that members of the National Enterprise Board should have public accountability for who they are, what they are, where their holdings are and what shares they hold in companies—and the emphasis is on public accountability. It will not be acceptable to my hon. Friends and myself for the Minister to start quoting various schedules and parts of an Act that say that the Minister has power to require members of the board to disclose their interests to him. It is not the disclosure to the Minister that bothers us but the disclosure to the public of their interests.
6.15 p.m.
In the Committee discussion, the question arose of company directors having to declare their interests in private and public companies. I am all in favour of that. I believe that it is right. I believe in open government and in open management of industry, and at the Committee stage of another Bill I supported the Government on disclosure of information. It is right that information that is available that will not damage the best interests of a company should be made publicly available. I cannot believe that it is right or proper that a member of the National Enterprise Board should not be required to declare for public examination the interests he holds, which may have some effect on his decisions or may not. Nobody is making him serve on the board. If he does not want to come forward with a declaration of his interests he does not need to accept a seat on the board. But it should be made clear to any men or women who serve on the board that they are spending public money and should be accountable to the public, who are entitled to know who they are, what they are and what will be their motivating forces in the actions they take.

Mr. Max Madden: I am sure the House is very grateful to the hon. Gentleman for his contribution this evening. We are very sorry that his hon. Friend the Member for Colne Valley (Mr. Wainwright), who laboured very long and hard on that Committee, has not had an opportunity to speak on this amendment although he did so in committeee. Does the hon. Member agree with me that whilst it is imperative that the public should have the information for which he has so rightly called, and that such knowledge of interest would be useful, even more important would be the extent of that interest? Does he agree with me that the Register of Interests for this place, and, hopefully, that which we shall secure for the National Enterprise Board, should shown the extent of the interest in addition to the interest itself? Does he agree with me that that is a very important advance that we should have?

Mr. Smith: I accept that. I entirely agree with what the hon. Member says and would go so far as to require that the spouse should declare her interest also!


I cannot speak for the whole of my party in that respect, but my party would certainly support the idea that members of the board should declare where their interests lie and also the extent of that interest. That is very important because we need to know the extent of the interest to be able to make a judgment. If someone holds £10 in a company I cannot believe that he will corrupt himself for the sake of £10. Some may do so, of course, but they are few and far between. I agree with the hon. Member for Sowerby (Mr. Madden) that the amount of a Member's interest in a company is certainly relevant here, and my colleagues and I would support the requirement for such a declaration of interest.
In passing, the reason I am moving this amendment instead of my hon. Friend the Member for Colne Valley is simply that he has asked me to do so because he is serving three days on the Bill in the House and we thought we would give him a little rest. It is one of the few amendments which I can be called to move, whereas we should retain our greater competence for the more detailed amendments that follow.
I hope that I have said sufficient. If not, we shall certainly return to this issue at a later stage in the discussion. Basically, I am seeking from the Minister at this stage an explanation why the Government have not chosen to honour what was understood to be a promise given in Committee.

Mr. Ian Mikardo: The arguments which have been used in support of the amendment by the hon. Member for Rochdale (Mr. Smith), as might reasonably be expected from him, are weighty. The account which he has given of the transactions in Committee is precisely accurate. When a similar amendment was moved by the hon. Member for Colne Valley (Mr. Wainwright) it attracted support from the back benchers of both sides of the Committee. We all had the impression that the Government spokesman was very much influenced by the weight of the arguments that were put forward. I share the surprise expressed by the hon. Member for Rochdale that on Report we do not find a Government amendment on this subject. Like the hon. Gentleman. I shall await with bated breath the explanation

from my hon. Friend the Under-Secretary of State.
As my hon. Friend wanted me to speak before him I shall have to do the unwelcome job of guessing what he will say. I find it difficult to think of the arguments that can be used against the amendment. In fact, I can think of only two. Very soon I shall discover whether I have been a reasonable tipster in forecasting what my hon. Friend will say.
I suppose that my hon. Friend could say that the amendment would place an obligation upon members of the NEB that does not apply to the British Steel Corporation, the National Coal Board, the British Airports Authority or, for that matter, ICI and Unilever. The short answer to that is that we have to begin at some time and at some place. If my hon. Friend wanted to urge upon us that having given us this we should support him in extending the principle to all sorts of other organisations, and particularly those, as the hon. Member for Rochdale has said, in which people have the responsibility of spending public money, I am sure that he would find a measure of support from all of us which would be gratifying to him.
In every new piece of legislation we aways find some change and some refinement compared with previous legislation. After all, we should learn from experience. For example, in this Bill we have learnt from the experience of the nationalisation measures of 1946 to 1950 that there is no point in giving a Minister power to make only general directions. Therefore, in this Bill and, I believe, in the Offshore Petroleum Development (Scotland) Act, there is power to make specific as well as general directions. That is how we evolve. We learn as we go along, and we learn from experience.
The pressure for the open government of business, whether public or private, has increased rapidly. It is one of the results of that pressure that the House has done something that some of us have been urging for many years—namely, to establish a register of Members' interests. That is particularly sensible as regards the NEB. For example, the NEB may consider the purchase of part of the assets of the XYZ company. The XYZ company may be in competition with the


ABC company. It is tremendously important that it should be known whether a member of the NEB has a beneficial interest in the ABC company whether by way of a remunerated directorship, remunerated employment or a substantial shareholding. That should be known, and it should be known at the point at which he is appointed or just before.
Of course, the sort of person that the Secretary of State will appoint to the board will be an honourable man, who will declare that sort of interest. I have no doubt about that. However, we have recently come to the conclusion that the declaration of interest, whilst it is important and valuable, is not enough in itself. Quite rightly, we have gone beyond it. Perhaps, as my hon. Friend the Member for Sowerby (Mr. Madden) says, we have not gone quite as far as we might have done, but at least we have taken an important step forward. That should also be true as regards the NEB. I do not see why it should be out of the mainstream of the tide which has been flowing towards greater openness in public administration.
I agree with the hon. Member for Rochdale that a declaration of interest to fellow members of the board is all very well but not enough if it is not made available to the general public. The public are entitled to know. The employees of the XYZ company are entitled to know that their destiny is being partially decided by the director of a company that competes with the XYZ company. Therefore, I cannot see why the argument that this is a first time should be used, if it is to be used, against the amendment.
Secondly, my hon. Friend may say that we want to recruit the best people for the board and that some of the best people might not be willing to make their affairs so public. He might claim that this would put a limitation on the size of the pond from which we could trawl the talent to run the board.

Mr. Michael Grylls: When the hon. Gentleman talks about directors of companies having interests and that sort of thing, the House will be aware that every director's other directorships are in a register at Companies House. The shareholdings of direc-

tors have to be published in annual reports. All the information that the hon. Gentleman suggests is secret is already widely known to the public. What he is suggesting is nothing new. If the public want to find this sort of information it is available either in company reports, in Companies House or in public documents. This is not such a revelation as the hon. Gentleman suggests. It seems that the hon. Gentleman is trying to make a mountain out of a molehill.

Mr. Mikardo: I accept that that is an accurate statement. However, I think that we can take this matter a bit further. I would like to see that happen because the number of people who have access to the information about which we are talking is limited. The hon. Gentleman says that the information is available at Companies House, but I put it to the hon. Gentleman that that is no reason for not extending it in the way that the amendment provides.

M. Cyril Smith: Does the hon. Gentleman agree that whilst this information is registered in the manner described by the hon. Member for Surrey, North-West (Mr. Grylls) it can be discovered only by going through the records of every company that is registered, whereas under this amendment the information would be filed under the name of the person concerned rather than under the name of the company?

Mr. Mikardo: That is precisely what I mean. Although I accept the situation as described by the hon. Member for Surrey, North-West (Mr. Grylls), I want it to go a little further. Clever people who are making some political or business point can always undertake the necessary research. The hon. Gentleman could do it and I could do it. The information can always be dug out, but that should not be necessary. This sort of information should be much more freely available. I should like to see that principle applied in many spheres.
If my hon. Friend says "We want to get all the talent we can, and there may be some chaps who will say 'I should like to serve on the NEB and I could make a good contribution but I am not willing to take the job because of this condition'", I would say "All right, that is fine, we shall do without you. You


are not the sort of chap we want to have carrying the responsibility of spending public money."
If I have not correctly anticipated whatever reasons my hon. Friend is to give for not accepting the amendment I could be put up the spout altogether. May be my hon. Friend will accept the amendment.
I shall listen with bated breath to my hon. Friend's reply. It will have to be good to persuade me not to go into the Division Lobby with the hon. Member for Rochdale.

6.30 p.m.

Mr. Crawford: Since we must now accept that the National Enterprise Board will operate in Scotland, I wish to support Amendment No. 173 tabled by the Liberal Party.
I agree with the hon. Member for Bethnal Green and Bow (Mr. Mikardo). Too often in Scotland and elsewhere in the United Kingdom bodies such as that which is envisaged, both semi-public and public bodies, have been nothing but payrolls for giving jobs to the boys—not just jobs for the financial boys, but jobs for the political boys. I should like to have seen included in the Bill provision for register of members' political interests. I accept the Liberal amendment so far as it goes, and I hope that they will force it to a vote. I look forward to going into the Lobby with the Liberals and also with the hon. Member for Bethnal Green and Bow.

Mr. Mike Noble: Both my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) and the hon. Member for Rochdale (Mr. Smith) touched on the subject of confidence, which is at the heart of the thinking behind the NEB. I suggest that we in the Labour movement have a special responsibility to look at the question of confidence in terms of employees of the companies involved with the NEB.
I believe that one of the reasons for the tarnished image of industries taken into public ownership by Labour Governments is that often the workers in those industries have no confidence in the boards that run them. I believe that we should pursue the philosophy which has been outlined by previous speakers in

this debate and open up this whole area to public scrutiny.
The amendment could afford a new opportunity to public enterprise. I believe that many people who were involved with the legislation in earlier stages felt that this would provide a new opportunity. The kind of thinking which led to a rejection of a promise which had been given earlier in Committee—namely, the proposal contained in this amendment—will turn people away from the concept pursued by the Labour movement. I look forward to supporting the amendment on a Division, unless my hon. Friend the Minister has a very good reason for saying that I should not do so.

Mr. Hugh Fraser: Since the Minister apparently is being a little bashful in dealing with this question, may I add a word on the amendment.
There are two points which have not been mentioned. It is important that the interests of NEB members should be shown. The board may have to undertake difficult negotiations and it will be easier all round if there is a straight declaration of interests. Nothing is more dangerous to those persons than innuendo—and innuendo could easily arise unless there is a proper declaration.
The second point is also important—namely, that the public wants to know that people who are appointed to the NEB are fairly well qualified. It is important to see that money is well spent. One of the troubles of the RIC was that it was frightened of the employers, and some of its sub-committees were not up to the standard required for the decisions which they made. I am certain that if more of those who were later employed in the motor industry had assisted in earlier years in putting British Leyland together, the difficulties would never have happened.
I hope that the matter will be fully considered by the Minister, particularly in regard to the protection of the individual who serves on the NEB and also in protecting the public who should know that the people employed on the board are well-qualified and will not waste Government money, as has so often happened in the past.

Sir Raymond Gower: I wish to add my modest support to what has been said by


earlier speakers on Amendment No. 173. Unfortunately, the Minister when replying to an earlier amendment, was not prepared to accept the proposal that qualifications should be written into the Bill. But the Minister could now make amends by agreeing to accept this valuable amendment. By the use of this device he could serve a double purpose. First, if the members have to declare an interest their qualifications will be apparent and, secondly, if there is any conflict board members can make clear that they are people of merit and ability and therefore not likely to be unduly biased.
The Government will be unwise to reject the amendment. I implore the Minister to take this matter seriously. By refusing to accept the amendment, the Government will give the impression that they do not care what impression the board makes. It is important that membership should be of such a nature that it will instil confidence in the public about board members. I hope that the amendment will be accepted.

Mr. Doug Hoyle: This is a very important amendment which we supported in Committee. The idea was that the register of interests should be declared by NEB members and also that the register should be open. I understand that in the discussion in Committee the Minister was not sure whether the register would be open to the public. On that basis he took the matter away to look at it again.
If we are to talk about "open government", we must begin somewhere. Indeed, if such a policy had been followed in the past, the situation would have been a good deal better. We certainly might have avoided some unsavoury incidents. Some of the people might not have reached their positions on public bodies if their interests had been known at an early stage. It is a good thing for the public to be fully aware of the background to the board's membership and that information should be freely available. I hope in the light of all that has been said the amendment will be accepted by the Minister.

Mr. Kaufman: I have listened with great interest to this debate, because I have always been a supporter of the disclosure of interests. I voted with the ut-

most alacrity when this matter came before the House. I had the utmost ease in filling out the necessary forms, because I having nothing whatever to declare. I am highly sympathetic to the arguments put forward by the hon. Member for Rochdale (Mr. Smith) and by my hon. Friends.
I considered this matter very carefully in anticipation of the debate and during the speeches that have been made today. When the matter was considered in Committee, my hon. Friend, the then Under-Secretary of State, undertook that the Government would look at this matter. I think that the hon. Member for Rochdale, quite unwittingly, slightly misquoted my hon. Friend when he indicated that my hon. Friend gave a specific assurance that an amendment would be produced. I do not seek to make much of this matter, but the hon. Gentleman is correct in so far as my hon. Friend certainly said that we would return to the matter. We should like to look at the matter further in the light of the arguments that have been put forward and in conjunction with Sir Don Ryder, between now and the stages in another place. We should like to look at the possibility of bringing forward a suitable amendment in another place which might cover the points that have been introduced during this debate.

Mrs. Audrey Wise: I remind my hon. Friend that this matter was discussed at the Third Sitting of the Committee on Tuesday 11th March. I am at a loss to understand why, at this stage, the Government are suddenly impressed with arguments that were put forward on 11th March. Moreover, the undertaking that was given on that date included the words:
the Government are anxious to produce a formula which is completely acceptable and which will produce complete public confidence, and that we shall have a look at the exact wording and return to this matter".—[Official Report, Standing Committee E, 11th March 1975; c. 155.]
I find my hon. Friend's statement that the Government now want to consult a trifle unconvincing.

Mr. Kaufman: I am sure that my hon. Friend the Member for Coventry, South-West (Mrs. Wise) would be the last hon. Member to believe that decisions on matters of legislation should be made by civil servants.
When I arrived in the Department of Industry a short while ago I did not find an amendment to deal with the matter that was raised in Standing Committee. Now that I have arrived in the Department, I wish, with my right hon. Friend, to look sympathetically at the arguments that have been put forward on this matter. I hope that my hon. Friend will take that point. I am not being unhelpful. I am seeking to be helpful in the light of the arguments that have been put forward and in the light of my reading of the reports of the Standing Committee, which I have been urgently doing since I was appointed to this job.
Therefore, I ask both my hon. Friend and the hon. Member for Rochdale—in the interests of being able to accede to the valid points that have been made, with which I am personally greatly sympathetic—to withdraw their amendment so that we can look at the matter with a view to being able, if possible, to table an amendment in another place.

Sir Raymond Gower: The hon. Gentleman has made a remarkable statement. Is he really suggesting that after the undertaking that was given several months ago, the matter was left aside and nobody bothered to do anything about it, and that it was only his arrival in the Department that brought the matter to light again?

Mr. Kaufman: I am certainly not saying that. Any hon. Member on either side of the House who has been involved in Standing Committee proceedings knows very well that when Ministers are involved in the kind of Standing Committee proceedings that took place on this Bill—100 hours or more, as my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) pointed out—it is not humanly possible to prepare amendments as we go which will cover every assurance made in a Standing Committee. My hon. Friend the Member for Oldham, West (Mr. Meacher) was involved in the Bill a great deal. The civil servants were also involved in servicing the Ministers as the Committee was sitting. We cannot operate in this way. All undertakings cannot be honoured on Report.
6.45 p.m.
Since I have been in the Government I have had the duty of dealing with five

Bills which have gone through the House. Assurances have been given in Standing Committee, and in relation to a number of them it has been necessary to put down amendments in another place rather than on Report.

Mr. Mikardo: I am quite prepared to accept my hon. Friend's difficulty if he is prepared to accept ours. Our difficulty is that the undertaking we were given was that what the Government would produce would be acceptable to us. If they had produced it for today's Report stage, we should have been able to judge whether it was acceptable to us. However, if they produce it in another place, and it is in a form which is not acceptable to us, we have no means of amending it or of dealing with it at all. We have to take it or leave it. As has been pointed out, there have been nearly four months during which nothing has been done. That does not give me great confidence that the next two or three weeks will produce something acceptable to us.

Mr. Kaufman: I well understand and share the view of my hon. Friend, the Member for Bethnal Green and Bow, that once a Bill leaves this place and one has to rely on amendments in another place, the control of the House of Commons over the Bill is not as great as we should like. However, I have not spoken with ill-faith in what I have said. If my hon. Friend did not like the wording of any amendment that might be tabled in another place, as a parliamentarian of great experience, he knows that it would be perfectly possible for amendments to be moved in this place by back benchers as well as by the Government. I am not responding to my hon. Friend's argument in the sense of judging whether he is right or wrong, but if he believes that there is a majority in this place for an amendment of that kind he may wish to test it. If there is a majority for an amendment of that kind, there will be a majority for him to move an amendment to an amendment tabled and carried in another place.
When amendments from another place are brought here it is open to all hon. Members to seek to amend those amendments in this House, with a Division if necessary.

Mrs. Wise: I understand my hon. Friend's difficulties which are not his fault


and which show the complete inadvisability of removing, during the course of an important Bill, three Ministers who are doing an excellent job in a Department. However, will my hon. Friend tell us what is wrong with the present wording? He has said that he does not like legislation by civil servants, but this amendment is not produced by civil servants and I do not understand what is wrong with it. Could he not reverse his argument and accept this amendment? Then, if some earth-shaking flaw were found, it could be amended in another place? If we can do all this in another place let us indicate the views of this House here and now.

Mr. Kaufman: I accept what my hon. Friend said. I do not wish to go into what happens when Ministers change office. I accept my hon. Friend's sympathy. I have given valid reasons why the three Ministers who were doing an excellent job in this Department did not bring forward an amendment, and why we did not find an amendment in the Department when we arrived there—there was not one.

Mr. Richard Wainwright: Mr. Richard Wainwright (Colne Valley) rose—

Mr. Kaufman: It is difficult to complete a sentence in this most interesting debate. Intermittently, I should like to complete one before giving way to another sympathetic intervention from one side or the other. I have indicated that we are sympathetic to the aims of the amendment. We would prefer the hon. Member for Rochdale to withdraw his amendment on the assurance that I have given, which I am sure he will accept in good faith.

Mr. Wainwright: The Minister alleges that his predecessors in the ministerial team in Committee were working so hard that they could not give a signal for an amendment in the spirit of the one to which his hon. Friend promised to return. Is he saying that on a matter of comparatively simple administration of this kind his highly talented predecessors were not capable of giving a signal to their staff to devise a better form of wording than we have tabled?

Mr. Kaufman: I am not saying that at all.

Mr. Hugh Fraser: Will the hon. Gentleman give way?

Mr. Kaufman: The right hon. Gentleman is a quite exceptional Member. I am sure that he will be good enough to allow me to reply to the hon. Member for Colne Valley (Mr. Wainwright). This is guillotine time. If the Opposition wish to intervene, it is not for me to argue with them.
I have indicated my sympathy for the amendment. I have also indicated that it is our wish to table an amendment in another place to respond to the feeling of the House. If hon. Members on both sides prefer us to accept the amendment now and to consider whether to amend it suitably in another place, I should be ready to respond to that alternative. However, we wish to consider the matter between now and when the Bill goes to another place. The alternative lies between the hon. Member for Rochdale withdrawing the amendment now and our bringing forward an amendment later, or our accepting it now but reserving the right to bring forward an amendment in another place. If it is the will of the House that it should be the latter, then, in accordance with my own inclinations, I shall do that.

Mr. Tom King: We have had a most extraordinary interlude in this Report stage. The Minister said that he had carefully read the Committee proceedings before deciding his attitude towards the amendment. My impression is that he has a brief which tell him to resist this amendment, but, having read the temperature of the House on this occasion he realised that he would not get away with
it.

Mr. Kaufman: When I read the Committee proceedings and saw this amendment, my inclination was to accept it. Unlike the Opposition, who have been against declaring interests, I have always been in favour of declaring interests. I wish to consider the matter further. I have been in the Department only a short time. However, I have responded to the feeling of the House. What is Parliament for if one does not do that?

Mr. King: The hon. Gentleman has clearly not read the Committee proceedings. If he had, he would know that I


said that we were in favour of the amendment in principle. I made that absolutely clear. Therefore, the Minister cannot accuse the Opposition of seeking to refuse disclosure in this area. The hon. Gentleman spoke as though he were somehow an independent Member who was not a member of the Government. Does he accept responsibility for undertakings given by his predecessor? If so, a clear undertaking was given by the hon. Member for Oldham, West (Mr. Meacher) to return to this matter. There has now been a rapid change of view, because the Minister realised that the going was getting too tough. He was trying to repeat what his predecessor had told the Committee, in the belief that he could keep us quiet for another spell.
The Minister has put the Opposition in a difficult situation. Hon. Members who were present in Committee will know what we said. We pointed out that we did not like the wording of the amendment, but that we accepted it in principle. The first objection was that we were not convinced that exactly the same qualifications which apply to Members of Parliament were necessarily ideal for members of the National Enterprise Board. I think that hon. Members of the Liberal Party will agree that they are seeking to establish the principle. For instance, they are concerned only with the financial interest. I suggest that more than the financial interest may be extremely relevant to the procedures of the NEB. For instance, if the Secretary of State decided to appoint a union leader who had no financial involvement but had a direct political or union interest, that fact should be made known. That is one fault that we find with the amendment. We do not consider that it covers the range of interests which might be extremely relevant and should be declared. As I understand the situation—

Mrs. Wise: Mrs. Wise rose—

Mr. King: Perhaps I may complete this point. I understand that the Minister is willing to accept the amendment or to table an amendment in another place. The weakness about relying on a Lords amendment is that there is no guarantee that it will be carried. If the Lords amendment is not carried, there will be nothing for the House to amend, and that provision will not be inserted in the Bill.

Therefore, we would be relying on the same assurance as was given in Committee, for which we have nothing to show.
Our difficulty is that there is no amendment which we find wholly acceptable. The Government have reneged, or failed to honour the undertaking given in Committee to bring forward an acceptable amendment. I think that the Minister will be pressed again on this matter. We shall have to wait and see which option he takes.

Mr. Kaufman: I recognise the hon. Gentleman's dilemma. When he thought that we might be defeated, he wanted to vote against us. Now that we are accepting the amendment, he wants to get out of it because he does not like it.

Mr. King: The hon. Gentleman should not accuse hon. Members of lack of principle.

Mrs. Wise: Mrs. Wise rose—

Mr. King: I should like to deal with the Minister's intervention. It is clear that the Government have no principles in this matter, save in so far as they count the votes behind them on all these issues and change their tune to suit them. It is not a question of our not having principles in this matter.

Mrs. Wise: I thank the hon. Gentleman for giving way. In Committee he said that he did not like this amendment
because it would lay obligations on members of the board without our knowing what those obligations were. We have not yet made the regulations relating to Members of Parliament.
But we have now made those regulations and we are actually filling in our forms. Some of the hon. Gentleman's statements are therefore a little dated.
In addition, since he knew that the Government had not brought forward an amendment, if the Opposition were genuinely in favour of this principle, why did they not table their own Amendment? I suggest that my hon. Friend was quite right when he said that somebody's bluff had been called. The Opposition's bluff has certainly been called on this matter. They are now faced with an amendment which has been accepted with good grace by the Government. The Opposition should show equal grace by acknowledging the Government's action.

Mr. Cyril Smith: I agree with the hon. Member for Coventry, South-West (Mrs. Wise) that the Opposition could have tabled their own amendment.
I thank the Minister for the gracious way in which he dealt with the debate and assure him that we accept the spirit in which the Government have accepted the amendment.

Amendment agreed to.

Clause 2

GENERAL PURPOSES AND FUNCTIONS

7.0 p.m.

Mr. Richard Wainwright: I beg to move Amendment No. 175, in page 2, line 26, leave out subsection (2) and insert:
'(2)The Board will have separate and distinctive responsibilities for—

(a) Identification of enterprises in difficulty—

(i) the early identification of those industrial enterprises which are vulnerable to overseas competition and/or where competitiveness is being undermined due to external factors;
(ii) the early identification of individual enterprises which are likely to reduce employment drastically or cease trading altogether.

(b) Provision of immediate assistance—
The National Enterprise Board shall be responsible for co-ordination and assistance to companies which are liable at short notice to cease trading or reduce the numbers employed drastically in such ways that—

(i) time is available to identify potentially viable parts of the enterprise and plans can be made and implemented for their continued existence;
(ii) additional financial or other assistance can be provided for those whose jobs are endangered.

(c) Assistance to improve international competitiveness—
Within the overall strategy for the future of British industry, the National Enterprise Board shall be responsble for co-ordinating and providing assistance to selected enterprises in order that—

(i) measures are taken that significantly improve the international competitiveness of existing or new sectors of British industry;
(ii) British industry can develop closer links with its European counterparts.
In order to discharge these responsibilities the Board will—

(a) establish a close working relationship with other bodies and agencies concerned with British industry;

(b) be empowered to provide assistance which shows an agreed rate of return for existing or proposed profitable enter prises;
(c) provide the Minister with a written case explaining the reasons and basis for assistance in any case. This will be laid before Parliament within three months of financial assistance being provided;
(d) ensuring, in consultation with the representatives of the Department of Employment, that all companies assisted develop adequate representation at both works and board level'.

Mr. Speaker: With this, we are to discuss the following amendments:
No. 3, in page 2, line 29, at end insert:
'with the exception of bodies corporate engaged in either banking or insurance business'.
No. 4, in page 2, leave out lines 32 and 33.
No. 5, in page 2, line 38, at end insert:
'(2A)(a) In any undertaking owned by the Board, the Board shall consult the employees as to the form of management they wish to see implemented;
(b) at any time trade union representatives of a majority of the employees in such an undertaking may require the Board to hold a ballot of all employees as to whether they wish to have the undertaking constituted as a workers' co-operative, and if the ballot shows a majority of the employees in favour of such a constitution, then the Board shall co-operate with the employees in its preparation, and shall implement it if a further ballot shows a majority of employees in favour of its implementation;
(c) the constitution of a workers' co-operative under this section shall provide for management by a worker representative body elected by all employees, for the payment of interest on capital employed to the Board, for payment of depreciation into a reserve fund, for an employees' income stabilisation fund, and for the division of the income of the undertaking between employees after payment of interest, depreciation, taxes and other provisions, in accordance with a Code of Practice approved by the Secretary of State which the Secretary of State shall by order direct the Board and any worker co-operatives constituted under this section to observe;
(d) a duly constituted worker co-operative which fails to observe its obligations under the Code of Practice shall revert to the managerial control of the Board.'.

Mr. Wainwright: The amendment represents a very substantial revision of the statutory aims of the National Enterprise Board and it is right that I should comment further on the Liberal Party's


attitude to the board. We endorse heartily the purposes proclaimed for it by the Government. We should be odd creatures indeed, in this commercially beseiged land, if we did not support the objective of the regeneration of British industry. We believe there is a great need for new methods of co-operation and co-ordination between the Government and industry. There has to be an orderly framework set up, not necessarily for the preservation of "lame ducks", but at least for dealing with them.
If anything is needed to show how urgently that is required it is the irresposible administration of the Industry Act 1972. The uses to which that Act has been put must horrify its authors, begetters and creators, and in recent months the House has been asked, almost in a panic way, to approve horrendously large sums of money in response to industrial emergencies. My party wants an orderly framework set up, after proper parliamentary deliberation, to handle the difficult situations which are bound to crop up from time to time.
In the amendment, we have set out three purposes for the NEB. We believe that a statutory duty should be laid on the board to prepare an inventory of the likely major needs of those industries which are known to be especially vulnerable. If Governments of the past 10 years had been proper stewards, such an inventory would already be available. We cannot imagine what on earth the NEDO and other Government and industrial organisations have been doing in recent years that they have not already prepared some sort of checklist of industries which may suddenly find themselves tipped over the brink. If this obligation is laid on the board by statute, Parliament would be protected in future from the almost hysterical process by which hon. Members are told that unless they agree by midnight to vote enormous sums of money, they will throw hundreds of thousands of people out of work.
We want the board to be given responsibility for administering the assistance provisions in the Industry Act 1972. I hope that this aspect of the amendment will commend itself to the Conservatives, who must have a very keen interest in the fate of the 1972 Act. We want the very powerful levers which that Act put into the hands of Ministers transferred to

a body that is politically less sensitive, which has no need to seek the votes of the electorate, and which has a proper degree of commercial responsibility. We also want to see the board under a duty to safeguard the international competitiveness of important sectors of British industry.
In trying to provide for all this, we are accepting that there is to be a board and that the only question is whether its objectives are to be framed vaguely, so that nobody can assess whether it has lived up to its objectives or fallen short—that would be most unsatisfactory—or whether it is to have fairly sharply focused aims which will enable its operations to be assessed by Parliament from time to time. The words in the Bill, which it is sensible to replace, are too vague and have a smell of the doctrinaire about them which is wholly inappropriate to Britain in its present commercial and financial distress. It is time for a sharper definition—for giving the Board more clearly allotted tasks and for getting rid of some of the woolly verbiage, the only practical purpose of which has been to paper over the cracks between the Government and its supporters.
It is in the interests of Parliament to speak clearly and demand precisions from the Government. I believe this amendment should be accepted as a modest contribution to those aims.

Mr. Heseltine: I am grateful for the opportunity to catch your eye, Mr. Speaker, and to move Amendment No. 4—

Mr. Speaker: Order. The hon. Member cannot move that amendment now. He can discuss it with the amendment moved by the hon. Member for Colne Valley (Mr. Wainwright) and I am prepared to allow a separate Division on it later.

Mr. Heseltine: I am grateful for your guidance, Mr. Speaker.
The amendment in the name of the hon. Member for Colne Valley (Mr. Wainwright) is extremely well drafted, and the general purposes he put forward provoke little quarrel from my hon. Friends and me, who spent many long sittings studying the Bill in Standing Committee. Although there are many arguments in favour of the amendment


it misses the main point of the purposes of the board. There are no material matters on which his amendment would make available powers which are not available under the 1972 Act.
We are, therefore, left with Amendment No. 4, which seeks to delete certain of the other provisions in the clause. It is when one moves from the essentially pragmatic approach of the hon. Member for Colne Valley to the essentially doctrinaire approach of the provisions in Clause 2, which extends public ownership into profitable areas of manufacturing industry, that one sees that the whole divide on this legislation stretches to an unbridgeable extent. There are areas which the hon. Member for Colne Valley is wrong to seek to embrace within the purposes of the board. He referred to the NEDC organisation, which must be dear to your own heart, Mr. Speaker, and it would be wrong to incorporate that organisation within an agency of this sort which is essentially made up of Government nominees. There is no dialogue or consultation. It is simply a group of people chosen by the Government to carry out any policies they may have at any particular time.
The original concept of the NEDC organisation has never had the opportunity of fulfilling the aspirations originally held for it. It should be a partnership in industry and it needs to be widened to bring within its orbit the financial institutions which own so much of British industry and which would enable it to achieve the aims outlined by the hon. Member for Colne Valley without the need for legislative changes. There is no reason why the NEDC and the little NEDCs cannot now assume the functions envisaged for them at the time of their creation.
One of the saddest reflections on industrial policy of the last decade is that the little NEDCs have not been given the proper opportunity, sufficient support, or a sense of purpose which could have given Britain's capitalist economy the chance of being comparable with some of the other capitalist economies which have used such devices far more effectively. It is wrong to have a statutory agency with only Government appointments as the framework within which the NEDC organisation should exist.
Using the NEB to administer the 1972 Act has an underlying value. The question is whether functions of this sort should be administered by civil servants in a Government Department or whether we are better off using an independent agency as a tool of Government. The argument is finely balanced. We have had experience of both. It was done directly under the previous Conservative administration and now we are moving on to a system of agencies—the NEB and the development agencies in Scotland and Wales. There is no room for doctrinal differences on this matter, but that takes us no further than admitting that the substance of this group of amendments lies in Amendment No. 4.
Our amendment seeks to remove from industrial policy political dogma which in the past has done so much harm to the credibility of successive Labour administrations. As long as we operate a mixed economy the rôle of profit must be fully understood. There has never been an occasion when, if profits increased, investment did not follow suit. When profits fall, investment falls, and unemployment rises. The cyclical changes of the last few decades have all followed this pattern. Therefore, we must seek to encourage profits, because that is the one sure way of increasing living standards.
One cannot overestimate the harm done in the minds of those who make investment decisions if they are constantly expected to take those decisions in an environment which they believe to be hostile to the concept of profit, and where they feel that, if a profit is made, there is a danger that the State will take the company into public ownership.
There is no clearer example of the harm which follows from doctrinaire intervention in industry than the damage done to the aircraft and shipbuilding industries. I dare say that the House will by now know that the Government have today, by means of a Written Answer, curiously to be lost in tomorrow's headlines, announced that they are not to proceed with the Bill to nationalise those industries.

Mr. Kaufman: That is not so. We have said that we are not proceeding with the Bill this Session. We have certainly not said that we are not proceeding with it.

Mr. Heseltine: What the Minister says is true. Last week the Government intended to proceed with the Bill as fast as possible and as a matter of utmost urgency. Today they intend to proceed, but not this Session, and it is perhaps for people outside this Government to decide whether that Bill will emerge on to the statute book with the urgency which is apparently intended for it.

7.15 p.m.

Mr. Kaufman: Mr. Kaufman rose—

Mr. Heseltine: I will not give way since I do not wish to stray beyond the narrow point about the effects on confidence which arise from this sort of provision.
The decision to introduce that legislation clearly had its effect on those people who make the investment decisions and, therefore, affect job security. They could see in the compensation terms no possible incentive for them to put more money into these industries. No prudent person could have continued to invest in them. Nevertheless, we are today told that, far from the Government coming in to fill the vacuum which was created by the sense of insecurity, they are to allow it to continue for at least a year. That is the minimum time that can now elapse before that Bill is on the statute book.
The consequence of the Government's actions is to have the most shattering effect on the industries concerned, which face very real but different international pressures. The consequences in terms of lost employment of the decision first to nationalise and now to proceed will be felt in real—

Mr. Kaufman: Mr. Kaufman rose—

Mr. Heseltine: I know what the Minister is going to say. He must realise, however, that the harm done to the job prospects and to investment in these industries by this cavalier treatment stems from a total misunderstanding of these two massive employers of labour. If the Minister wants to see British industry competing and able to play a full rôle, it must know with certainty the background against which it must take investment decisions. The uncertainty will have a serious effect on our ability to compete in these activities, and since industry is an on-going process these effects will have a debilitating long-term influence.

There is no doubt that these industries will suffer because of the Government's inability to make up their mind and to pursue their legislative programme through the House of Commons. There is no conceivable excuse for what has happened.
The situation we are left with is totally obnoxious. I know of no body of opinion which wants a spread of nationalisation into profitable private industry. All the information available to me indicates that employees in both the private and public sectors are against it. I have just spent some time with the shop stewards of the Bristol Channel Ship Repair Company. The former Secretary of State for Industry was not even prepared to talk to them.

Mrs. Wise: Is the hon. Gentleman not aware that the employees of Scottish Aviation, to name but one group, were very keen for their company to be included in the nationalisation proposals, and that the Government reluctantly gave way to pressure?

Mr Heseltine: I know that the shop stewards in that company took that view. I suspect that the organised voice of the trade unions, as we discovered in the referendum, represents a far smaller number of people than the block votes at Labour Party conferences indicate. When people and employees, as opposed to members of trade unions, are asked for their views, the surveys show that they do not want nationalisation. Yet Parliament seeks to make a deliberate decision as a result of which many profitable companies, which offer opportunities to hundreds of thousands of our fellow citizens, will be nationalised. Those companies do not want it. They will not be asked whether they want it. It will just happen.
The Government will be able to buy up to 10 per cent. of any company without the public or the House knowing that the Government are buying shares, because they will be able to use a nominee holding. Anyone who suggests that that is the spirit of open government, worker participation, or democracy, misunderstands the meaning of those words.
We are now confronted with a piece of doctrinal legislation under which the National Enterprise Board will serve one


purpose, to transfer power from where it now lies in society, where it is broadly spread throughout large numbers of people, small and large companies and the self-employed, to the State. We shall be confronted by a small number of Ministers, who are overworked and under pressure, who are unable to apply a proper control over the companies with-in their domain, yet who claim to answer to the House for the vast accretion of power which year by year is added to by the bigots of the Left wing.
The Government tell us that such measures will be profitable, will serve the public interest, and will create more sensitivity to the community, and that the taxpayer will obtain a fair deal for the money which he is being compelled to invest. What is the reality? There is no nationalised industry of any substance or scale, with one or two exceptions, which does not lose astronomical sums. There is incontrovertible evidence that the public regard the nationalised industries as providing a different service from that provided by the private sector. Every time a Bill proposing further nationalisation measures is introduced we are told that it will lead to the more profitable use of the nation's resources. I have sat through the consideration of measure after measure and I have listened to Labour Minister after Labour Minister promising profits as a result of nationalisation. I have never seen those profits materialise. There is one reason for that. The moment that Ministers have power over those industries they interfere with those industries and destroy the motivation of management and the economic structure upon which those industries could be profitable.
I do not know how many hon. Members read the recent article by Graham Turner in which he interviewed managers of nationalised industries. How anyone can read that appalling record of confusion, uncertainty and lack of confidence in the morality of what is being done, and believe that it is right to subject an increasing number of British companies to that suffocating bureaucracy, passes the understanding of the Opposition.
How shall we make industry more effective in answering the needs of the customers and providing the increasing

standards of living which our people want? The inclusion of these dogmas will continue that destruction of confidence in this country which has led today to one of the most dramatic reversals of the cynical opportunism with which the Government come to power.

Dr. Bray: I do not support the proposals which were discussed by the Opposition. I wish to discuss Amendment No. 5, and I should like to take up a number of points made by the Opposition.
The hon. Member for Henley (Mr. Heseltine) emphasised the rôle of profit. He said that that must be fully under stood. I agree, as would most hon. Members on both sides of the House. The question is—what is the understanding? The purpose of the amendment is to recognise the rôle of profit and to say that it cannot be fully discharged unless profits are distributed to the workers who produce them.
The hon. Gentleman also laid stress upon the necessity to consult the workers and to ask for the opinions of the workers. If he is prepared to allow that and to allow the workers to choose the form of management, Government supporters look forward to seeing the hon. Gentleman supporting this amendment if there is a Division.
The hon. Gentleman complained that the Bill would transfer power to the State rather than to the people working in industry. If he means what he says, I hope that he will support Amendment No. 5, the purpose of which is to enable the workers in an undertaking which is under the control of the National Enterprise Board to choose the form of management.
The amendment requires the National Enterprise Board to consult the employees of each enterprise it owns as to the form of management they wish to have, and, if the workers so choose, to allow the enterprise to be run by the workers as a workers' co-operative.
The position which we face in industry today is that the trade unions have great power over a limited front. They have a dominant influence on wages and conditions but little influence on investment, production, pricing, or even employment. Their responsibility is specifically denied,


and we hear a great deal of talk of management prerogatives. The result is that there is an acute imbalance, of which the most obvious symptom is the present roaring pace of inflation, and the subsidiary consequences of a lack of investment, stagnant production and rising unemployment.
That position cannot be sustained. Governments of both parties have tried to restrict the powers of workers in their trade unions, and both have failed. We may have seen the beginning of another such attempt this afternoon.
There is now general acceptance that the only possible course is to widen the range of issues over which workers are able to exercise their power to enlarge industrial democracy, but there is great confusion over what this means or how it should be achieved—confusion to which I fear the Government have added by the three unco-ordinated approaches in the Industry Bill, the Employment Protection Bill, and the foreshadowed Industrial Democracy Bill, the provisions of which have yet to be reconciled.
In Committee my hon. Friends and I tabled amendments to clarify the issues and to offer a coherent way ahead. My hon. Friend the Member for Chester-le-Street (Mr. Radice) tabled an amendment on supervisory boards, which he is now pursuing by means of his Industrial Democracy Bill. I tabled an amendment to permit the further stage of development of enterprises into full workers' co-operatives, if that is the will of the workers involved. That amendment allowed the workers in any enterprise, whether or not owned by the National Enterprise Board, to opt for constitution as a workers' co-operative and thereupon to be taken over by the National Enterprise Board, under workers' control.
This amendment is more restrictive. It is limited to enterprises already owned by the NEB. As such, the amendment will have the support of the Opposition. As recently as 9th June, in the debate on the Second Reading of the Statutory Corporations (Financial Provisions) Bill, the hon. Member for St. Ives (Mr. Nott) speaking from the Front Bench, said:
I would be perfectly happy to see some of the public sector run on the basis of competing workers' co-operatives. Why is it that the whole basis of co-operation amongst workers has to be kept in the private sector?

The idea of setting up workers' co-operatives in the public sector is very interesting."—[Official Report, 9th June 1975; Vol. 893, c. 64.]
The status of a workers' co-operative, with its responsibilities as well as privileges, cannot be thrust upon the workers. They must be free to claim it. At present they are free to do so by demonstration, by industrial action, by publicity in the mass media, and by public sympathy when faced with closure. But no Member of Parliament would regard that as a satisfactory form of industrial or political action. There should be a properly constituted procedure by which the workers would be enabled democratically to establish the form of management as responsible worker management under viable schemes of organisation.
7.30 p.m.
This procedure the amendment seeks to offer by means which I spelt out more fully in Committee and with which I would not venture to trouble the House on Report under the guillotine. But under this amendment the workers' co-operative must be viable in an economic sense. It must pay a satisfactory rate of interest on the public capital it employs. It must preserve its assets by paying depreciation on the assets it is using. It must be able to cushion the year-to-year variation of income of its workers with an income stabilisation fund, and if it fails in these requirements, long before it would go bankrupt, if it were a private enterprise, it must revert to the managerial control of the NEB.

Mr. Anthony Nelson: Would the hon. Gentleman care to explain this to me a little more simply? I have a specific question. I did not quite understand from the wording of the amendment. When he talks of the interest paid on the capital which would be made available from the NEB, is he referring to interest on loan capital or a return on an equity investment which would be in the form of a dividend? I assume that he cannot be talking about the latter, because he is talking of dividing up the yearly profit between the employees in the company. If that is the case, would he care to take, for example, an extractive industry where the asset value of the company is run down, and the capital value of the company is naturally included in the yearly


dividends and profits of that company? Would he care to explain how, in that specific example, where it has been accepted that there will be an ability, under the Bill, to take a governmental interest, there will be an adequate return to the taxpayer who is basically making capital funds available?

Dr. Bray: I acknowledged in Committee that the range of enterprises which it was possible to operate as a full-blown workers' co-operative, in the sense in which it was defined in Committee, was limited. For example, if the capital intensity were so great that it could not reasonably be expected that the workers could stand the year to year variation in profits, even with the aid of the income stabilisation fund, it could not undertake the responsibility to operate as a workers' co-operative, and would have to maintain its status as a managerially-controlled public enterprise.
I refer the hon. Member to the report of the debate in Committee, where the requirements were spelt out in more detail, but it is not a code for "lame ducks"; it is a licence for tough, efficient, workers' co-operatives—a constitutional response to the underlying forces in society, which the Government set out to make in the Bill. It is a practical mode of operation for the NEB enterprises, and even without this amendment the NEB will have powers under the Bill to operate in this way if it decides to do so. I hope it will do so, but it will need strong ministerial encouragement without the sanction of this amendment.
The wider objective of allowing the workers in any enterprises to opt for constituting their enterprise—because the right is there—as a workers' co-operative is a policy which I hope the Labour Party will adopt as part of its next election platform, on which we shall return to the House in due course.

Mr. Wigley: The three amendments debated so far are very different ones, and appear to be aimed at different objectives. I am not sure whether the debate is facilitated by that fact.
To go through the three briefly—we have considerable sympathy with some of the objectives of the Liberal amendment, but it would appear from the wording that it precludes the NEB from being

able to establish new manufacturing units, and I should have thought that, from a Liberal point of view particularly, this would be an important part of the board's activities. I should have thought that a National Enterprise Board ought to put the emphasis on the word "enterprise", in that, where the private sector has failed, one of the activities of the board should be to promote industry, itself setting up industry by its own initiative. As far as I can see, if the Liberal amendment were carried the ability of the board to do that would be taken away. It could be argued that it would be covered under Clause 2(1)(c), which relates to the provision of employment in any part of the United Kingdom, but the guts of it would be taken away from subsection (2), which provides for
establishing, maintaining or developing, or promoting or assisting the establishment".
For that reason I find it difficult to support the Liberal amendment, although I have great sympathy with it.
The Conservative amendment goes to the guts of the ideological battle between the two sides of the House. It is just as ideological for the hon. Member for Henley (Mr. Heseltine) to propose deleting this part as it is ideological for the Government to have it in. In fact, if this part were deleted completely, I would interpret it as meaning that the NEB would have no powers even to hold minority interests in companies in which it wants those minority interests, nor to influence decisions within those companies to achieve the other objectives which are included.

Mr. Heseltine: That is in no way the case. The hon. Member will know that in the Industry Act 1972, which the Conservative Government put on the statute book, Clause 2(4) provided every opportunity for the Government to own shares if there should be a case for it. We are arguing that there needs to be a reason for owning those shares, and that reason is not good enough if it simply consists of a bland statement that the State should own for the sake of ownership.

Mr. Wigley: I am grateful to the hon. Member for that intervention and clarification. I certainly agree that there ought to be reasons, and those may be based on a number of factors. I should have thought that as a consequence of carrying


his amendment there would be consequential amendments that would inevitably have to be written into subsection (4). If the hon. Member is saying that that is not the case, I should have thought that carrying his amendment would not necessarily stop the Government from taking a line on extending public ownership by a different method. The facility would still be there in subsection (4) if there are no consequential amendments.

Mr. Heseltine: The hon. Member is quite right. The ability would be there, but it would have to be used for one of the reasons indicated, such as the assistance of the economy, the promotion of industrial efficiency, or the safeguarding of employment. It would have to be done for reasons of that sort, and those are commendable reasons to people who have those views. What is not commendable—and we would not accept this in any way—is that the board should proceed to nationalise companies for no reason at all other than that those companies happen to exist.

Mr. Wigley: Those comments will be of interest to many hon. Members, and I will take it from that statement that any other amendment that may water down subsequent sub-sections will not be pressed from that point of view. None the less, I believe that the argument for and against the Conservative amendment here tends to be an ideological one, and for that reason I find it rather difficult to commend the amendment.
The amendment proposed by the hon. Member for Motherwell and Wishaw (Dr. Bray) is the most interesting and, in the long term, quite the most far-reaching of the amendments that we are discussing today. It goes to the very nub of what is to happen within the public sector in due course, and, I would hope, within parts of the private sector as well. The tragedy within the nationalised industries in the last 25 years is that for the employees within those industries there has been very little change indeed from the ownership by remote capitalist to the ownership by remote State holdings. In fact, the day-to-day activities have proceeded in very much the same way, and I believe that, if nationalisation and State participation in industry are to continue.

there have to be very radical steps indeed in order to bring the employees into the area of decision-taking within such companies.
I commend the hon. Member for Motherwell and Wishaw in the wording he has chosen for this amendment, in that he has stated that, whereas it may be for a trade union representative to call for a ballot, the ballot would be for all employees, and it is most difficult to make sure that all employees would be involved in this function. This is a very important matter in the development of any such concept. It may be that this development is one that foreshadows the development of an industrial democracy bill, and it may well be that the Government's answer to this amendment would be in those terms. None the less, I believe that this is the guts of the argument that will take place over the next few years concerning the future of British industry, and I hope that as a prelude to that argument we shall carry this amendment.

Mrs. Wise: I wish to support Amendment No. 5, moved by my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray). In doing so, I want to expose the falsity of the claim of the hon. Member for Henley (Mr. Heseltine) that there is a wide spread of power in British industry today. He must surely be aware that there are no fewer than 22 sectors of industry where control of more than 50 per cent. of the trade is in the hands of six or fewer companies. In food processing, for example, three companies control more than 50 per cent. of the industry. That cannot be described as a spread of power in the population.

Mr. Heseltine: Is the hon. Lady aware that the companies which she is discussing are owned by the pension funds and life assurance companies of the people who work in those companies?

Mrs. Wise: But the hon. Gentleman will not try to tell me that they are controlled by those pensioners. I would feel a good deal happier if that were the situation. The power of decision making in those companies is in a very limited number of hands, completely unelected and in many ways irresponsible in that they are responsible directly to no one.
However, since the Opposition probably will concede that this Bill will be enacted and that therefore there will be a National Enterprise Board with undertakings controlled by the NEB, I have no doubt that, despit their rosy view of private industry, when they turn their attention to the NEB, they will find it in themselves to support Amendment No. 5 in view of their constant reiteration of their support for worker participation, for open government, for consulting workers and for having ballots. They must concede that the NEB will be correctly and properly required to consult its workers in these ways.
I suggest also that the Government themselves must look with favour at this amendment in view of our manifesto commitment, which is to bring about not only a shift of wealth in favour of working people but also a shift of power in favour of working people. If we are to make a reality of this, we have to start now.
As it stands at the moment, Clause 2(2)(d) refers to
promoting industrial democracy in undertakings which the Board control…".
It lays upon the Board the duty to promote industrial democracy. But nowhere in the Bill are there any mechanisms for doing this. It is not realistic to impose on the NEB a duty and to give no guidance as to how that duty should be carried out.
My hon. Friend's amendment is extremely cautious. It would lead to tremendous changes, because it is beset with a number of obstacles. I have no doubt, and I am sure that the Government can have no doubt, that any enterprise in which the workers have been through this obstacle course must be one in which those workers are determined and enthusiastic about self-management. It could not happen accidentally. It could not happen as a result of a whim. They must really be extremely committed to the idea of self-management, and I have no doubt that at every stage there would be many voices explaining to them the pitfalls.
This is a very moderate exercise in introducing some desirable experimentation in industrial democracy. Government supporters, including Ministers, accept that nationalised industries as we have seen

them in the past fall short of a democratic ideal. We acknowledged this in our manifesto. For that reason, I look forward with interest to hearing the Minister acknowledge those words, and I hope that he will accept the amendment. If he does not, I am afraid that I must again exercise that scepticism to which I referred earlier. That would be a great pity, because the Government would be losing a considerable opportunity to harness the desire of workers to have some say in their lives in the place where they spend so much of their lives—their place of work.
I think the Government ought to be grateful to my hon. Friend the Member for Motherwell and Wishaw for giving them the opportunity to accept this cautious, moderate and carefully worded amendment.

7.45 p.m.

Mr. Tim Renton: In the course of 40 long sittings of the Committee on the Industry Bill, I do not think that I was ever privileged to listen to such a fatuous speech as that just made by the hon. Member for Coventry, South-West (Mrs. Wise). She referred to the food processing companies as being responsible to no one. Her main reason for making that extraordinary remark was apparently that they controlled a large share of the United Kingdom market. When will the hon. Lady and other Government supporters realise that even the large and successful companies are responsible? They are responsible to their employees and to their shareholders. It is only when Government supporters start to realise that that they will cease to put forward obtuse schemes of the kind that the hon. Lady outlined.
However, it is not my purpose to speak for or against Amendment No. 5. I wish to speak to Amendment No. 3.
Earlier today, the Under-Secretary of State said that he had toiled through the reports of our proceedings in Committee and that it had been like reading "War and Peace" three times over. I should have thought that Tolstoy would have been preferable to the words of the previous Under-Secretary, although often they were about as long as each other.
When the Under-Secretary reached the minutes of our Sixth Sitting, I am sure that he will have read with amazement the


various comments made by his predecessor in office, who tried to convince us that the White Paper, which the Prime Minister said so often would be the exact model for this Bill, did not refer just to manufacturing industry. The previous Under-Secretary got himself very much into the mood of Humpty Dumpty who said to Alice,
When I use a word, it means what I choose it to mean— neither more nor less".
In that important debate, the Under-Secretary failed to adduce any evidence that when the White Paper had been brought forward, it was the Prime Minister's intention and that of the Government that it should embrace banking, insurance, retailing, services, distribution or whatever. Yet that is what the Under-Secretary told us was its intention. Certainly he said that it was within its ambit.
Therefore, the Opposition tabled this amendment seeking specifically to exclude banking and insurance from the companies which the National Enterprise Board could take over or from the activities in which the board could become involved. There is a very good reason for being specific about these two activities.
A Labour Party Conference resolution was passed in October 1971 in which it was urged that:
The Labour Party's General Election Manifesto should include proposals to nationalise all banking and insurance companies.
Therefore, it is important that the Government's purpose in relation to insurance and banking companies—and I should like to declare an interest here as a director of a bank—should be made explicit tonight.
There are three reasons why the NEB should not become involved in any of these areas. The first is that I accept that large sums of money are needed for capital investment in manufacturing industry and that certain industries in this country, such as the machine tool industry, the heavy engineering industry and the computer industry, have been short of investment funds. If the NEB, regretfully, is to come into being, it is into those areas that its funds should be directed.
I accept, too, that there have been gaps in the areas into which funds have

flown in this country over the past decade. For that reason I am delighted to see Finance for Industry in existence now and entering into a large number of loan commitments to help out manufacturing industry.
However, these are all areas with heavy capital investment programmes where money is needed. This simply does not apply to banking or insurance. Their fixed assets are relatively small except in the case of their buildings, but I have never heard anyone say that banks or insurance companies have too few buildings. The opposite is the case.
The second reason is that banking and insurance is essentially a people's business. For the sake of Labour Members I should explain that it is people with a small "p" to whom I am referring, not people with a large "P".
Many people go into banking and insurance today because they believe that if they have intelligence, imagination and enterprise these are areas in which they can prosper. As my hon. Friend the Member for Henley said earlier, the article by Graham Turner points out how frustrated management in many nationalised industries feel today. I do not want the managements in our banks and insurance companies, which among other things are main providers of invisible earnings in this country, trammelled by the same sort of restrictions from which the managements of nationalised industries suffer.
The third reason, and perhaps the most valid reason of all, is that the banks and insurance companies are primarily concerned with other people's money. Their business is to invest that money. The last thing I want to see is a direction from the Government to a bank or insurance company in which they have, perhaps, a 25 per cent. or a 30 per cent. stake, that the funds deposited with that bank are to be channelled into some enterprise which appeals to the National Enterprise Board. This sort of development has occurred in other countries.
Some months ago the previous Secretary of State for Industry implied that he would like to see funds that were deposited with banks and insurance companies directed under his aegis or the aegis of the NEB into its pet projects. [HON. MEMBERS: "Hear, hear."] Labour


Members say, "Hear, hear". It is precisely because that would be most damaging for the funds invested with banks and insurance companies that I should like to see this amendment adopted.

Mr. Madden: The hon. Gentleman is almost bringing tears to my eyes, and I am sure that those victims of the collapse of the Nation Life Insurance Company would reflect with some bitterness on his comments about the effective and successful nature of private enterprise in that sector. Would the hon. Gentleman comment on the failings of private enterprise, insurance and the propriety of those firms asking the Government to set in train rescue operations?

Mr. Renton: I am delighted that the hon. Gentleman has raised the example of Nation Life because he is making my next point for me. If he has studied the affairs of Nation Life at all he will know that the number of people with policies in Nation Life—that is, not the regular endowment policies but the income policies—who suffered through that collapse which I deeply regret, as does the hon. Gentleman, is numbered in a few hundred only. I submit to him—

Mr. Madden: No.

Mr. Renton: Yes, that is absolutely true. I submit that because there are a few hundred unfortunate individuals involved who were probably tempted into buying these policies because they offered a good deal, that is not a reason for the Government to take over the insurance industry as such. This will, perhaps, happen through the Policyholders Protection Bill. I am glad to see that that Bill has already been emasculated in another place. I sincerely hope that the Government will have second thoughts about it and throw it out altogether. However, it exists, and the threat of Government interference and the reality of Government intervention through the statutory compensation fund that they are creating is very plain.
The late Secretary of State for Industry injected new funds into Giro and wrote off a loss of £28 million at the same time as he said that he wished Giro to compete with the clearing banks for funds. Therefore, in both the banking and the insurance area there is already a clear

potential determination by this interventionist Government to move in under the aegis of the NEB.
It is interesting that Sir Don Ryder, at a Press conference yesterday, reported in the Financial Times, emphasised that he had no ambitions to take over a bank or any other City institution. I am delighted to hear it. I ask the Government tonight to make their intention crystal clear and to state that they nave no intention of taking over either a bank or an insurance company by accepting this amendment and thus removing the shadow that has hung over these important institutions for some months.

Mr. J. W. Rooker: I apologise for not being present for the whole of the debate, but I have been in Committee.
I should like to think that Amendment No. 5 would be a pressure point on my hon. Friend the Minister to make a statement on the issue of industrial democracy. As one who spends every Wednesday morning pushing the Industrial Democracy Bill through the House in addition to other commitments, I shall be pleased when the Government either take it over or bring forward their own measure.
I do not think that the Industry Bill is the right place for this measure. In this House last night two meetings took place between hon. Members, shop stewards of NVT at Wolverhampton and Small Health, and shop stewards of the Meriden co-operative. I was present at the meeting with the NVT shop stewards. They told us of the accusation by consultants, who had been appointed by the Govenment to examine the industry, that the shop stewards were not toeing the line. They were asked whether they wanted to run a co-operative. The stewards did not answer in the affirmative. I may be doing them an injustice, but I had the impression, which was shared by others, that they were not prepared to pay the price that has to be paid in 1975 to run a cooperative—the price that the people at Meriden have paid.
When it was stated that the Meriden people were on a five-day working week, were receiving £50 each, and had orders for two years, it appeared to be resented by the other half of the company. The situation would be even more complex under this amendment if the NEB were allowed


to impose, put forward or push along this idea.
If the Government do not introduce an industrial democracy measure there will be trouble on the Labour benches and there will be a complete blockage by the trade unions of any form of technical innovation or advance in manufacturing technology.
The price will be so heavy that the Government will have to pay it by bringing forward legislation. Although the Employment Protection Bill will not cover this point in detail, it will cover much of the amendment. Bearing in mind what I heard last night from the shop stewards who had been threatened with a co-operative, I shall think twice before going into the Lobby to support the amendment.

8.0 p.m.

Mr. Nelson: I share the view of the hon. Member for Caernarvon (Mr. Wigley) that the amendments are incompatible. There is a basic point of contention in this House which is rather more than an ideological difference and which devolves on the question of risk and risk capital. It is particularly relevant to Amendment No. 3, which was so eloquently spoken to by my hon. Friend the Member for Mid-Sussex (Mr. Renton). As a primary responsibility we should ensure that the utilisation and management of capital are directly related to the risk factor of those who make the capital available. I appreciate that this is a difficult argument for Government supporters to accept, and I also appreciate that in putting it forward one is often regarded as doing so with little regard to the rights of so-called democracy within industry or the movement towards more worker control in industry.
When one is talking about a possible intervention by the State into areas like banking and insurance, and when ideas of worker co-operatives are being proposed, it is worth reiterating that it is the risk element which is the essential criterion for the success of an enterprise. To separate the management of capital and those who benefit from the utilisation of those resources entirely from those who make the money available is to do the latter group a disservice and lessen the chance of further moneys being made available.
That is why I regret the possibility that the use of funds by the NEB may go into areas of banking and insurance. I must immediately declare an interest, as an employee of a bank. The rationale behind the intervention in profitable areas of industry, as set out in Committee by the previous Under-Secretary of State, is to fulfil two purposes—one to ensure greater possibilities of employment and the other to identify areas of spare capacity or under-utilisation of capital. Those two purposes hardly apply to the banking or insurance sectors of industry.
The success of the banking and insurance industry has been mentioned, but it is worth saying that the extent to which a number of major companies tend to dominate the commercial banking field is a reflection of the high regard and trust that depositors put in those banks. The banks would not be large unless they had the support and the deposits of individuals, companies, pension funds and a wide variety of institutions. They are, therefore, essentially different from the example given of the food manufacturing industry. I also believe that other sections of industry will perform better if the financial sector—both insurance and banking—remains independent of them.
I regret the woolliness of the Liberal amendment, but I support it because it is a restriction on the potential powers of the NEB. I regret it to the extent that it seems to leave open the explanation of its third objective of assistance to improve international competitiveness by empowering the board to provide assistance which shows an agreed rate of return for existing or proposed profitable enterprises. It is easy to make such a bland statement without indicating how such an agreed rate of return will be achieved. It is easy to say that one shall have an agreed rate, but how does one set about achieving it, what are the criteria of success, and what happens if one does not achieve them?
Secondly, it has proved not possible to identify early enough those industries which will fall on hard times. That is exemplified by the number of major industries which have come to successive Governments asking for Government funds. The identification of enterprises in difficulty is far less easy than is suggested by the bland statements contained


in the amendment. Nevertheless, as a further restriction of the wide, undefined and discretionary powers accorded to the NEB in the amended Bill, the Liberal amendment is one which I would wish to consider supporting.
May I finally comment briefly on the proposal for worker participation? it again exemplifies the point about the responsibility for risk capital. The essential point about the worker co-operative, as I tried to bring out in Committee, is that one is separating the risk factor in capital employed from those who have the control of the resources and, indeed, the utilisation of profits and, as I suggested in my intervention earlier, there is the possibility of erosion of the capital value of the moneys being put forward where the company's asset has a fixed life. It is as important to maintain the relationship between risk and reward and it is one which worker co-operatives, certainly as they are set out in the amendment, go a little way to achieve.
It is not adequately stated how a code of practice will ensure that workers in a particular industry will declare that they consider that they should not go on employing themselves any longer, unless it is envisaged that under such a code the NEB will have some form of supervision which will always operate. If that is so, the effective power of the worker co-operative would be fettered to a large extent.

Dr. Bray: Does not the hon. Gentleman agree that even at present the risk is by no means borne only by the provider of capital? Is not the real risk borne by the workers? In the drafting of this amendment and the other amendment in Committee I showed how, even in a risky business such as ICI, under the rules I put forward it would be perfectly possible for workers to bear the total risk that the company has borne over the past 10 years. As for the mining company, or the extractive industry, the depreciation methods I put forward in Committee would have fully refunded the capital invested in the initial sinking of a mine shaft and the initial development of a mine. The hon. Gentleman has not thought through clearly the respective rôles of capital, labour and risk bearing. Risk bearing is by no means identified with the provision of capital.

Mr. Nelson: I hope to meet that intervention head on because I have given the matter careful consideration. The hon. Gentleman is entitled to his view, but he is wrong. The risk element is entirely missing from the sort of relationship included in the amendment. There are situations in which the employees must bear the full brunt of a company which is not profitable and cannot continue operating, just as the shareholders have to do. That is exactly the point raised in relation to the Nation Life situation.
The Government have an important responsibility to ensure that when depositing their funds with an institution people retain an individual responsibility to do so with one which will utilise those funds responsibly. In investing those funds they balance the risk factor against the security factor. In seeking and maintaining employment a person does so with an industry that has a reasonable opportunity of maintaining that employment and he will hopefully work to generate that continued prospect.
Once one takes away this opportunity from the individual—as an employee, investor or depositor in a bank—once one takes away the risk element, one reduces the responsible attitude that the individual has towards the utilisation of his funds and his employment. Whilst I do not accept that the philosophy should be entirely weighted towards shareholders' interests, I do not believe in going to the other extreme, as the amendment seeks to do.

Mr. Ron Thomas: I support Amendment No. 5, but before speaking to it I wish to make some comments on the whole question of banking and finance. I should be happy if we were fighting a real battle over the National Enterprise Board, really becoming involved in the banking and insurance world, which I believe has completely failed the nation.
We have only to look back over the past few years, to the property and land speculation boom, to see what is behind that belief. While British industry was starved of capital investment, the banks and insurance companies were falling over themselves to lend money for property and land speculation. On the basis of the appreciation of those capital assets, they were lending more and more money


—even money to pay the interest on the money already lent. Then a number of those bubbles were pricked. When the property market went into a decline, the banks and insurance companies provided what can only be described as speculative funds in the commodity markets, leading to speculation in international commodity markets.
In many of our industrial competitor countries, the banks serve a far more useful productive purpose in relation to industrial enterprises than they have ever done in the United Kingdom or are ever likely to do with the present set-up.

Mr. Tim Renton: Before the hon. Gentleman continues with his wild catalogue of accusations, would he care to name one major investment project in industry that was brought to the banks in the years that he mentions, and that had a chance of a viable return on capital, that did not find funds from the banks? If he cannot, he should not make such wild allegations.

Mr. Thomas: The hon. Gentleman added a qualification with the reference to viable projects. What the banks consider a viable project and what industry and working people consider to be a viable project are poles apart.
Can the hon. Gentleman tell me why German banks make a considerable contribution to the finance of German industry? Is he suggesting that British entrepreneurs in industry do no have viable projects that they can take to the banks? If so, there is only one answer, which is that we shall have to have a more rapid extension of public ownership. The hon. Gentleman knows as well as I do that British banks, not just under a Labour Government but under a Tory Government, and indeed a Liberal Government, have failed to respond to the needs of British industry. They prefer to put their money into short-term speculation internally or internationally when they can.

8.15 p.m.

Mr. Tom King: The hon. Gentleman compared German and British banks and German and British companies. I do not know whether he was present when the Chancellor discussed in the House earlier the physical impossibility of a British company making a projection of the return on investment at the current rate

of inflation. I had evidence this morning of competing British and German companies which both had an opportunity to invest in a new project. The British company cannot go ahead, because it is competing against a German company which is in a country with a 6 per cent. inflation rate, and which can make an accurate forecast of the potential profit from the project. Therefore, the British company has regretfully had to decline the investment because there is no way in which it can project what the return on the investment will be.

8.15 p.m.

Mr. Thomas: I remind the hon. Gentleman that immediately after the election of the Tory Government in 1970 companies were given massive funds by tax hand-outs. We did not then have the level of inflation that we have now, but still they refused to invest, using arguments similar to those that they are using now. But I do not see the connection between what the hon. Gentleman said and the rôle of the banks in the present situation. Plenty of companies are making judgments and are going forward with investments in the year to come. It is a great pity that there are not many more.
It was suggested that banks are people's businesses. That is exactly what we should like them to be. We should like them to be owned by the people, because to some extent the banks and insurance companies are collecting the money from the ordinary people. Certainly that is true of the pension funds. I am rather surprised that the hon. Gentleman does not realise that the average worker who contributes to those funds has no control over them. Many trade unions, such as my own—ASTMS—are trying to bring about that situation, in which the workers who create the pension funds have some control, even if limited, over them. Private companies are adamantly refusing to allow that.
Quickly to sum up on the banking and insurance question, there was talk of profitability. Many Members on the Labour benches are fed up with our taking into public ownership only non-profitable industries which have been raped and exploited by private interests over decades. When they can no longer make a profit but are still needed to keep


private industry going, the community is expected to look after them. We are told time and time again that because an industry is profitable we must not touch it. Many of us want to see the philosophy changed, and changed quickly.

Sir Raymond Gower: Is the hon. Gentleman aware that there are many Members on the Conservative benches who feel that nationalisation has been a one-way movement for far too long, that the public sector has become too big, and that it is time we stopped this kind of thing?

Mr. Thomas: The bulk of the industries that have been taken into public ownership, if not all, were industries in which private enterprise had failed miserably. They were essential industries, in order to keep the private sector going. If they had collapsed, the private sector would have collapsed with them. Apart from that, private industry has teen receiving massive handouts from the Chancellor of the Exchequer over the past few years.
I now turn to Amendment No. 5, which makes it clear that the workers will decide whether they want a co-operative. They will not be forced into this. It would be a contradiction in terms to force a co-operative on to a group of workers who did not want it. The first lines of the amendment are rather significant. They read:
In any undertaking owned by the Board, the Board shall consult the employees as to the form of management they wish to see implemented.
That may take many different forms. It is an important matter that when the NEB takes over an undertaking, it will discuss the whole management structure and the kind of management structure that workers in that particular firm or part of an industry would like to see implemented. The amendment makes it quite clear, as my hon. Friend the Member for Coventry, South-West (Mrs. Wise) pointed out, that there would be a ballot and that the workers would decide whether they wished to have a cooperative.
The code of practice has been mentioned. When we are dealing with people's lives in industry, it is all right

to have codes of practice and to get rid of the legislation and put codes of practice in its place, as was done recently in legislation relating to health and safety at work. Therefore, I see no difficulty about having a code of practice approved by the Secretary of State.
But the essential point is that made by my hon. Friend the Member for Coventry, South-West—that we should take this opportunity to have some experimentation in terms of worker control and worker democracy and industrial democracy. As has been rightly said, our manifesto made it quite clear that
we will introduce new legislation to help forward our plans for a radical extension of industrial democracy in both the private and public sectors.
The workers in industry are calling out for radical changes of this kind. If we intend to harness the energies, skills and experience of working people, then this amendment can make a considerable contribution towards that end because we can have an experimentation in terms of what is required, and I believe that all concerned will learn a great deal from it.

Mr. Fairbairn: As you will appreciate, Mr. Deputy Speaker, one of the differences between the law of Scotland and the law of England is that the law of England is essentially based upon fictions. One of the phenomena of Socialism is that it is also based, to an even greater extent than the law of England—for which Socialists have such disrespect—on fictions.
There is no greater fiction than that which is sought to be placed in this Bill—the concept of extending public ownership. "Public ownership" sounds as if it means that what did not previously belong to the public becomes the property of the public. However, to extend public ownership means taking what belongs to the public and ensuring that it is never owned by any member of the public again.
The second thing that "public ownership" means is that if there is one certainty it is that those who are employed in industry, be it in the public sector or the private sector will have increasingly little say in their own affairs if their industry is taken into what is called public ownership. It is based upon the absurd


fiction that if one turns industrialists into bureaucrats they become better industrialists, or, alternatively, that if one turns bureaucrats into industrialists, they become efficient industrialists. I believe both of these to be further fictions.
One of the difficulties in our society is that it is the policy of Labour Members that the number of drones in the hive should be increased and the number who are productive workers should be decreased. Those on the Opposition side of the House take the view that the drones—the workers normally do this in beehives—should be extinguished by the workers and by those who are productive and produce the honey.
One of the next fictions of Socialism is that economic rules are suspended for the extension of public ownership. Unfortunately, however, as the Government are finding out, that is not so. They are finding that money is not something which private people have to make work when Governments can just get it out of a box and throw it about as they like. They are discovering that the same economic rules eventually apply to this, however much they may he committed to the concept that the State is preferable to, superior to and more efficient than individuals.
I was very interested in the subject of Nation Life, which was mentioned a few minutes ago. It was said "What about the very unfortunate people who have invested their money in Nation Life and have lost it?" Let us take that analogy. If one extends public ownership without permission and consent, and without anything else, one has to be a compulsory tax investor in the company, this nationalised, publicly-owned thing. One has no say over it. One is not allowed to limit one's investment or to say when one should stop investing. One makes continuous losses without complaint.
It has been shown again and again that the ordinary affairs of human beings in commerce, whether undertaken by Governments or not, are run infinitely worse or infinitely more painfully if they are taken into what is called public ownership which merely means the extension of bureaucracy into matters in which bureaucrats should have no concern. That has been the principal burden on the

nation. I trust that the House and the country will for ever realise that the words "public ownership" do not mean public ownership at all. What they mean is State control, non-ownership and no possibility of any member of the public having anything to do with the enterprise which is so affected.

Mrs. Wise: As the hon. and learned Gentleman is so concerned about the poor taxpayer, will he say why his party denationalised only profitable sections of nationalised industries and left the taxpayers to bear losses in other sectors?

Mr. Fairbairn: That is a strange generalisation. However, although it is said that hitherto only non-profit-making sections of industry have been nationalised, it is not because the Socialists happened to say "Let us pick up all the nonprofit-making sections." They just said "Steel, electricity, coal, aircraft or shipbuilding"—as took their power interest.
Towever, the point is that no industry that has been taken into public ownership has become more profitable and no industry would be more profitable if it were nationalised. If anyone can find an exception to that rule I would be most surprised. I do not believe that there is an exception I totally support the amendment to prevent any extension of bureaucracy and Government interference in commerce and industry, upon which even Labour Members who are so interested in jobs and employment may rely.

Mr. Kaufman: Listening to Opposition Members makes me quite clear why I am a Socialist. When I hear what they have to say I reflect upon the fact that my constituents would not believe that they existed if they saw them. My constituents would believe that they were characters in a fictional television play, talking about banking being a people's business and various other strange remarks totally irrelevant to the lives of ordinary people.
I am sorry that the hon. Member for Henley (Mr. Heseltine) has not seen fit to be present for this debate. He made a shoddy and tendentious speech introducing amendments, refused to give way when I sought to correct him and now is not present to hear my reply to him Nevertheless, I shall make my reply to him because it is necessary to put right


among other things, his deliberately misleading statements about the Government's intention on the nationalisation of aircraft and shipbuilding.
8.30 p.m.
The hon. Member for Henley spoke at some length on this subject, which is why I find it necessary to reply to him on this amendment. He seems to take the view that if he makes a speech and does not give way, if will never be possible to correct him. The hon. Gentleman does not realise that other people have opportunities to speak even if he does not give way to interventions.
He spoke of what he alleged to be the Government's intention not to proceed with that Bill. I wish to make it clear to this House, with the authority of my right hon. Friend the Secretary of State, that although it is not possible, for reasons which everybody in this House will accept, to get that Bill through in this Session, the Government have decided that they will proceed with the Bill at the very earliest opportunity in the next Session, with a view to Royal Assent and vesting the companies to be nationalised as early as possible in 1976.
That is the position of the Government—that this is a firm commitment of the Government; and I cannot understand why, for the flimsiest of debating reasons, the hon. Member for Henley decided that it was necessary to mislead the House in this absurd and tendentious way.
The hon. Member spoke about the aims of the National Enterprise Board as though he were speaking from a record of dazzling success of private enterprise and talked of the Industry Act as though it were the last word in Government assistance, a last word which would put totally and for ever to right the ills of British industry; and that that being so, nothing whatever needed further to be done. The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) said that under the National Enterprise Board citizens would be compulsory investors in industry. My hon. Friends and constituents have been compulsory investors in British industry under the Industry Act of the Conservative Government of 1972 to the tune of very large sums of money.
In this Bill we are seeking to ensure a return for our constituents for the money that is invested rather than that the money shall be handed over free, gratis and for nothing, with no return. It is one thing to be a compulsory investor. It is quite another to be a compulsory donor. When the hon. Member for Henley spoke of the Government having reversed their stance, I remind him that it was his Government who first brought out a lame duck policy, under the right hon. Member for Knutsford (Mr. Davies), and followed it with the Industry Act of 1972, which only the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and the hon. Member for Oswestry (Mr. Biffen) had the grace to oppose.

Mr. Fairbairn: Mr. Fairbairn rose—

Mr. Kaufman: I usually give way to the hon. Gentleman. I am always extremely interested to listen to him or to read what he has to say, and I was particularly interested in his reflection on the law of Scotland. I recall a remark of his in a Scottish Committee, perhaps one of the most profound ever made, that in Scotland the penalty for bigamy is two mothers-in-law—something I have always recalled as a piece of eternal wisdom.
In view of the remarks about the scope of the National Enterprise Board by hon. Members opposite and my hon. Friends, it would be useful if I were to say a little more about its scope so that there can be no doubt about that. The board will provide a new source of investment capital for industry. It was made clear in the White Paper, "The Regeneration of British Industry", that the board would also have the task of promoting industrial efficiency and profitability by promoting or assisting the organisation or development of an industry. It will be a channel through which the Government will assist sound companies which are in short-term difficulties. I am quoting almost verbatim from the White Paper. Hon. Gentlemen opposite attach a great deal of importance to the White Paper when they feel that we are departing from it. The board will assist much-needed industrial expansion in areas of high unemployment, thus creating jobs where they are most needed, and will have power to start new ventures and participate in joint ventures with companies in


the private sector. These objectives are aimed at industry generally, not just manufacturing industry.
The White Paper indicated that a great deal of the board's activities will be concentrated on manufacturing industry and I hope that no one would question the importance of that. But in exercising the former IRC-type rôle of promoting industrial efficiency by promoting or assisting the reorganisation, the board will be free to operate throughout industry, as the IRC did. The only function of the National Enterprise Board specifically limited in scope is that of expanding public ownership into
profitable areas of manufacturing industry
There is nothing in the Bill which would preclude the board from acquiring an interest in any company apart from the special exception which we are making in the case of companies involved in the media. That applies as long as a company operates within the purposes and functions set out in the Bill.
I thought that it would be useful for the House to have that general statement of our view of the rôle of the NEB before I come to the different amendments which have been grouped together.
First, I turn to the Amendment No. 175 tabled by the hon. Member for Colne Valley (Mr. Wainwright). I take it from the remarks which the hon. Gentleman has made throughout the proceedings on the Bill that this is a well-intentioned attempt to veer the Bill around to the Liberal view of what it should contain, unlike the hon. Member for Rochdale (Mr. Smith), who seemed to want to sink the Bill completely. The hon. Member for Colne Valley sees a positive rôle for the NEB, but by attempting to define closely the functions of the board the hon. Gentleman's amendment runs grave dangers of preventing the board from acting when it needs to do so.
There are examples of activities ruled out by the hon. Gentleman's amendment as drafted which I might mention. They include the promotion of action to remedy regional imbalance in employment opportunities—without going into functions in the Bill which were perhaps deliberately excluded, namely, public ownership. There is a danger of conflict between setting out clearly defined and delimited purposes and ensuring that the board has

the necessary flexibility in its powers to enable it to cope with problems which may not have been foreseen when drafting took place. In the Government's view the Bill defines the board's purposes both comprehensively and succinctly. We believe that the more discursive style of the amendment will lead to difficulty. Within the comprehensive functions listed in the Bill, the Government have set out their view of the priorities in the White Paper. Therefore, I must tell the hon. Gentleman that we cannot accept the amendment as it will go very much counter to what we see as the rôle of the NEB.

Mr. Wainwright: Is the hon. Gentleman under a misapprehension? There is nothing which I seek to delete as regards regional opportunities or anything of that kind.

Mr. Kaufman: No, I was not under that misapprehension. I was advisedly saying what I said. When the hon Gentleman has the opportunity to study what I said he will find nothing inconsistent.
I turn to Amendment No. 3, which was moved and supported with such passion. The amendment seeks to exclude those popular and democratic bodies of banking and insurance from the scope of the Bill.
As I have said, it has always been made clear in the White Paper and in what my right hon. and hon. Friends have said in Committee that the main concern of the NEB will be with manufacturing industry. However, its activities should not be confined only to manufacturing. I repeat and endorse that view. I would not expect the NEB to be engaged in commercial banking or the insurance sector, but it might well find its rôle as acting as a source of investment capital to industry usefully discharged through a merchant banking subsidiary. A provision in the Bill such as that would cause difficulties if the NEB acquired basically manufacturing companies with interests in banking and insurance, since the effect of the amendment might mean that the NEB would not be able to continue those interests.

Mr. Nelson: Mr. Nelson rose—

Mr. Kaufman: I would be grateful it the hon. Gentleman would allow me to


proceed. We have 50 minutes left before the guillotine falls on this group of amendments. It is necessary that I am able to reply to what has been a full debate. Following this group of amendments there is another important amendment with which we have to deal. I would gladly give way, but if I did so I would cut short the time for debate on the next amendment.

Mr. Nelson: Mr. Nelson rose—

Mr. Kaufman: Parliament voted for the guillotine and I am sure that the hon. Gentleman is in favour of the sovereignty of Parliament.
The IRC was not limited to manufacturing industry. It was performing useful work in non-manufacturing areas when it was wantonly and short-sightedly abolished by the Conservative Government. The NEB is intended to be a flexible instrument as regards industrial development, whose resources shall be readily available to assist in the promotion of a healthy industrial organisation wherever it may be appropriate to do so. The primary focus will be on manufacturing industry, but there is no reason to rule out such activity completely or other obligations, with the exception of the news media which would be acceptable as being a special case. We gave an assurance in Committee and assurances generally are taken seriously.
I wish finally to reply to the argument advanced on Amendment No. 5 in respect of worker co-operatives under the National Enterprise Board. For the reasons which were put forward by my hon. Friend the Member for Birmingham, Perry Bar (Mr. Rooker), I do not think it is right to include that amendment in the Bill—not because we are not following the principle of commitment to workers' co-operatives but for reasons which I shall point out a little later.
My hon. Friends will be aware of the provision set out in Labour's programme for 1973. My hon. Friend the Member for Liverpool, Walton (Mr. Heller) had this document in his collection of Labour Party programmes at the Department. That programme indicated our commitment to set up a co-operative development agency. This is one of the Govern-

ment's policies and I assure my hon. Friends that the Government are actively considering this proposal to establish such an agency as included in Labour's programme and our manifesto.

Mr. Heffer: Does not the Minister agree that by accepting this amendment which establishes the co-operative development agency, the whole process can be integrated and that there is no contradiction between the two?

Mr. Kaufman: I very much appreciate my hon. Friend's argument, but one of the most important activities in the encouragement of worker co-operatives—a process to which the Government are committed—is that these bodies should be given the best possible chance of success. We believe that it would be harmful to the whole project of these co-operatives if they are not given the best possible chance. We must make sure that those co-operatives have the best wind behind them. There is a considerable prospect that if the amendment were incorporated in the Bill, they would go forward more sporadically than would be helpful to the situation. I appreciate that this involves a difference of opinion.

Mr. Ron Thomas: The Bill contains words to the effect that we should promote industrial democracy. Is it my hon. Friend's suggestion that we must stop short of the amendment?

Mr. Kaufman: My hon. Friend places me in a dilemma. I am aware of what the Bill says about the promotion of industrial democracy. I am very much in favour of experiments in workers' co-operatives and I hope that they will prove successful and will expand, but I do not think the Bill, with its enormous potential for rejuvenating British industry, is an appropriate vehicle to carry out as an offshoot experiments on workers' co-operatives, for reasons which I shall attempt to give a little later.
There is nothing in the Bill to prevent the NEB from providing finance to a potentially viable worker's co-operative or from organising part of its operations on a co-operative basis. But there would be considerable risks in putting on the board an obligation to promote specific experimental forms of industrial organisation.
8.45 p.m.
To encourage all of the NEB's holdings to turn themselves into workers' co-operatives would, apart from anything else, reduce the NEB's ability to carry out its other functions. It is one of the objects of the NEB to ensure that the power it acquires from the ownership of important parts of industry is used for the good of the economy as a whole, for example as a means through which it can create jobs in areas where they are most needed.
If the NEB's undertakings are turned into co-operatives the NEB will lack the base from which to carry out its employment promoting functions. As I have told my hon. Friends, the promotion of cooperatives is a matter to which the Government are giving serious thought, but I do not believe that it should be added to the NEB's rôle in a way which would divert the NEB's attention and impede it in carrying out its other vital rôles. The board has already been given the function of promoting industrial democracy in undertaking its control, and this function will be exercised in the context of the Government's proposals for far-reaching extension of industrial democracy throughout industry.

Dr. Bray: Will my hon. Friend bear in mind that workers' co-operatives have been the most effective body for maintaining and protecting employment, and that this is by no means incompatible with the other objectives of the NEB? Can he say whether the Co-operative Development Agency, as envisaged in the manifesto, would have a rôle in producer cooperatives, because that is not clear in the manifesto? Will it have any power over NEB undertakings?

Mr. Kaufman: It would be wrong to go into too much detail at this stage about the Co-operative Development Agency, because it is a matter that we are considering. I draw my hon. Friend's attention to pages 35 and 36 of Labour's Programme 1973 where he will see the very wide scope that is proposed for the Co-operative Development Agency.
I am sorry not to be as forthcoming as my hon. Friend would wish, but I totally accept what has been said by hon. Members on both sides of the House about the unsatisfactory nature of industrial democracy in the present nationalised in-

dustries. My right hon. Friend the Prime Minister, in one of his public speeches when he was in Opposition, spoke about the need to socialise the nationalised industries. I believe that that is a major task of both the Government, through the nationalised boards, and the NEB when it comes into being and starts carrying out its functions.
Nevertheless, I do not believe that this amendment in its present form is the right way of pursuing the objectives that we all share. Therefore, I fear that I cannot accept it.
However, I must tell the Opposition—if I have not made it clear already—that I certainly cannot accept the amendment which they have put forward. If any group of hon. Members in the House has cause to hide its head in shame for the way in which it has failed British industry, it is the Conservative Party. For the Conservatives to come forward now and try to hobble the most hopeful, potential development in British industry is totally destructive.

Mr. Tom King: I find myself in some difficulty in rising to my feet after the last sentences of the Minister's speech, which really takes one's breath away, especially in view of the comments which he made earlier, about the Government's handling of two vital industries, namely the aircraft and shipbuilding industries. If the Minister shares any collective responsibility for the present situation he is the one whose head should be more than hidden at present.
Instead of sneering at other people's views, as the Minister chose to do at the beginning of his speech, I should like to start by agreeing with the hon. Gentleman that the Opposition think that it would be wrong to accept the amendment of the hon. Member for Motherwell and Wishaw (Dr. Bray) concerning industrial co-operatives.
We fully understand the frustrations that exist on both sides of the House about the mess that the House is in over what is happening in terms of industrial democracy. Hon. Members have gone through the charade in Committee every Wednesday and they will have to continue to do so until 11th July, which I believe is the crucial date after which the Bill will be unable to proceed. Those


hon. Members are understandably equally frustrated.
The Employment Protection Bill and this Bill refer to industrial democracy without giving any definition. The Welsh Development Agency Bill and the Scottish Development Agency Bill also refer to promoting industrial democracy, and nobody yet knows what that is.
In our discussions the hon. Member for Motherwell and Wishaw made a number of points which merit consideration. The amendment would have wide implications. The principle could be extended to private industry. Rights in industry are not solely confined to employees. An increasing number of hon. Members on both sides of the House are anxious that the rights of employees should be recognised, but they are not the sole rights about which we should be concerned. Shareholders also have rights. Many people, by the convoluted system of pensions funds and other activities, may be affected. For example, trade union pension funds could represent part of the ownership of a company. It would be wrong for these to be expropriated by a move towards workers' co-operatives. There might be implications for inward investment into this country if there were some facility for expropriation by workers' co-operatives.
The Minister, with some feeling, said that worker's co-operatives should be given the best possible chance. Having inherited the problems of the Scottish Daily News and Meriden, we can understand why the hon. Gentleman said that.
The Opposition are not opposed to workers' co-operatives. They represent an experiment and development which is well worth encouraging. But we are not in favour of workers' co-operatives, born out of illegality or out of expropriation of other people's assets or funds. Therefore, we cannot support Amendment No. 5.
The Minister said that it was possible that the NEB might inherit a merchant bank or other activity. One problem under the guillotine procedure is that we shall not reach an important amendment on fair competition between the public and private sectors and the need for an appeal or arbitration procedure. I hope that this point will be seriously considered

by the Government. The guillotine will kill discussion on that matter. The disaster that we face with this important Bill is that we shall not have adequate time to discuss that crucial matter. I hope that the Government will give serious consideration to this matter in another place. It is particularly important that there should be fair competition between banks operating on public money and banks operating on depositors' funds.
Our main amendment relates to the extension of public ownership. I do not think that the hon. Member for Caernarvon (Mr. Wigley) understood that our objection was not that some share of profitable companies might be acquired in furtherance of certain other aims, but that a specific function of the NEB is the extension of public ownership for its own sake. There is a clear difference of view between both sides of the House on that matter.
The evidence is clear that the nationalised industries have not tended to be efficient, profitable or valuable to the community. Many hon. Members have asked why the public should not have a stake or involvement in profitable businesses. The clear evidence is that the Government, the public and the Treasury have done far better out of companies net directly controlled by the Government in terms of tax revenue than out of any Government-controlled industry.
We are opposed to monopoly. The non Member for Coventry, South-West (Mrs. Wise) said that the food industry was in too few hands. That seems utterly farcical, because her suggestion is that it should be put into even fewer hands and go into a monopoly situation. That is what we resent. The board threatens to extend the monopoly powers existing in so many nationalised industries.
The Prime Minister has said that he wishes to establish a clear frontier between the public and private sectors. How will he maintain that frontier if the board is to be allowed, with very little restraint, to buy into profitable manufacturing industry? Any pretence that there is to be a frontier is palpably false.
The Under-Secretary talked about the Bill to nationalise the aircraft and shipbuilding industries as if it were a minor detail. The fact that it is not going


through in this Session of Parliament and will have to be held over to the next means that uncertainty will be further prolonged, and that is utterly outrageous. Perhaps the Under-Secretary has been too busy reading the reports of the Standing Committee, or perhaps this matter is not his direct responsibility, but at the moment the situation in these industries is quite clear. If the Secretary of State has spoken to the aircraft companies he will know the problems they are facing in maintaining the confidence of export customers and their problems over performance guarantees for export contracts. The delay is causing damage to this industry and to the shipbuilding industry, which faces an extremely difficult worldwide situation. Are we to understand that the terms of compensation have been altered? Are the safeguard provisions still in force?
The blanket of indecision, delay and uncertainty will seriously affect these industries. The Bill is being delayed until the next Session of Parliament and, with our present economic problems, God knows what the Government programme will he by then.
Are we to have further delay and indecisions? The Government should have announced today that they would proceed and get the Bill through in this Session, or they should have removed uncertainty by announcing they would drop the proposals altogether. The damage done to these industries and to the employment of the people who work in them will be the sole responsibility of the Government, because of the mess they have made. It is a further example of the damage they have done to confidence in industry. Amendment No. 4 is an attempt to rebuild that confidence, and we shall certainly press it to a Division.

9.0 p.m.

Mr. Richard Wainwright: This kaleidoscopic debate demonstrates again how ill-adapted are the procedures of this House in the situation in which we have all had to live for the last 15 months—with many parties on the Opposition side and several groups on the Government side of the House.
The worst evil of a procedure which fails to take account of a great variety

of views on a massive Bill like this is that it makes it so easy for Ministers to appear to get away with it. The Under-Secretary was able to pass over the most serious contributions to the debate in the most superficial way because he was in the difficult position of replying to such a variety of contributions, ranging to and fro between the Liberal proposals, the amendment of the hon. Member for Motherwell and Wishaw (Dr. Bray) and the Conservative proposals.
I shall be very brief, because these proceedings are under a guillotine. I shall recommend my hon. Friends to vote for the amendment in the name of the hon. Member for Motherwell and Wishaw (Dr. Bray) if, as I hope, we are given the opportunity to do so. I shall also recommend them to vote for the Conservative amendment, not because I particularly support its concentration on these lines but because I would like to see the whole of subsection (2) removed.
On the Liberal amendment, I want to make clear what was manifestly not clear to the Under-Secretary. No part of it even hints at seeking to remove subsection (1), which deals splendidly with the need to promote employment in certain parts of the kingdom. It seeks to lay on the board separate and quite distinct responsibilities, for which it will have to report separately. I am disappointed that the Under-Secretary, for all his ingenious and diverting asides, never confronted the central point of the argument, that it is not good enough for a massive corporation of this kind to have such woolly functions that it can never be brought to book, and that it should always be able to say that it has somehow furthered industrial democracy and promoted the reorganisation or development of certain industries. It is necessary that there should be very much clearer criteria by which to judge the NEB.
In a sense, the Under-Secretary gave me my case when he read to the House great chunks of the White Paper in order to leave us in no doubt about the scope of the board. That, he said, was what the clause is supposed to achieve. By finding it necessary to treat the House to an entirely different version of the board's functions, he has admitted that the wording in the clause is ineffectual.
I am tar from claiming that the wording in our amendment is perfect. However, can the Government not see that a group of hon. Members who have welcomed the purposes of the board and have gone a long way to overlook some of its lesser flaws, as we see them, feel entitled to a hearing for a point of view which seeks to show how the board could become more acceptable to a wider spectrum of British opinion?
The amendment in no sense tries to wreck the board. We say that in view of the appalling failures of the past, under Governments of both parties, we need a fresh approach, borrowing the experience of other countries which have made a

greater success of State enterprises. Let us, above all, be able to tell the public that this gigantic corporation can be judged by clear criteria, out of which it will not be able to wriggle. I am sorry that, contrary to his usual practice, the Under-Secretary did not try to meet our argument but slithered away, aided by the extraordinary procedure which afflicts this House. My hon. Friends and I will seek to divide the House on our amendment.

Question put, That the amendment be made:—

The House divided: Ayes 208, Noes 223.

Division No. 252.]
AYES
[9.04 p.m.


Aitken, Jonathan
Goodhart, Philip
Madel, David


Alison, Michael
Goodlad, Alastair
Marshall, Michael (Arundel)


Atkins, Rt Hon H. (Spelthorne)
Gorst, John
Marten, Neil


Bain, Mrs Margaret
Gower, Sir Raymond (Barry)
Mates, Michael


Baker, Kenneth
Gray, Hamish
Mather, Carol


Banks, Robert
Grimond, Rt Hon J.
Mawby, Ray


Bennett, Dr Reginald (Fareham,)
Grist, Ian
Maxwell-Hyslop, Robin


Benyon, W.
Grylls, Michael
Mayhew, Patrick


Berry, Hon Anthony
Hall, Sir John
Meyer, Sir Anthony


Biffen, John
Hall-Davis, A. G. F.
Miller, Hal (Bromsgrove)


Boscawen, Hon Robert
Hamilton, Michael (Salisbury)
Mills, Peter


Bottomley, Peter
Hampson, Dr Keith
Miscampbell, Norman


Bowden, A. (Brighton, Kemptown)
Hannam, John
Mitchell, David (Basingstoke)


Boyson, Dr Rhodes (Brent)
Harvie Anderson, Rt Hon Miss
Moate, Roger


Braine, Sir Bernard
Hastings, Stephen
Molyneaux, James


Brotherton, Michael
Havers, Sir Michael
Monro, Hector


Brown, Sir Edward (Bath)
Hawkins, Paul
Montgomery, Fergus


Bryan, Sir Paul
Hayhoe, Barney
Moore, John (Croydon C)


Buchanan-Smith, Alick
Henderson, Douglas
Morris, Michael (Northampton S)


Buck, Antony
Heseltine, Michael
Morrison, Charles (Devizes)


Budgen, Nick
Hicks, Robert
Morrison, Hon Peter (Chester)


Bulmer, Esmond
Holland, Philip
Mudd, David


Butler, Adam (Bosworth)
Hordern, Peter
Neave, Airey


Carlisle, Mark
Howe, Rt Hon Sir Geoffrey
Nelson, Anthony


Chalker, Mrs Lynda
Howell, David (Guildford)
Neubert, Michael


Churchill, W. S.
Howell, Ralph (North Norfolk)
Newton, Tony


Clarke, Kenneth (Rushcliffe)
Howells, Geraint (Cardigan)
Nott, John


Clegg, Walter
Hutchison, Michael Clark
Page, Rt Hon R. Graham (Crosby)


Cockcroft, John
Irvine, Bryant Godman (Rye)
Parkinson, Cecil


Cooke, Robert (Bristol W)
James, David
Pattie, Geoffrey


Cope, John
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Penhaligon, David


Crawford, Douglas
Jessel, Toby
Percival, Ian


Crouch, David
Johnston, Russell (Inverness)
Pink, R. Bonner


Crowder, F. P.
Jopling, Michael
Powell, Rt Hon J. Enoch


Davies, Rt Hon J. (Knutsford)
Kaberry, Sir Donald
Prior, Rt Hon James


Dean, Paul (N Somerset)
Kershaw, Anthony
Pym, Rt Hon Francis


Dodsworth, Geoffrey
Kilfedder, James
Rathbone, Tim


Douglas-Hamilton, Lord James
King, Evelyn (South Dorset)
Rawlinson, Rt Hon Sir Peter


Drayson, Burnaby
King, Tom (Bridgwater)
Rees, Peter (Dover &amp; Deal)


Durant, Tony
Kirk, Peter
Reid, George


Dykes, Hugh
Kitson, Sir Timothy
Renton, Rt Hon Sir D. (Hunts)


Edwards, Nicholas (Pembroke)
Knight, Mrs Jill
Renton, Tim (Mid-Sussex)


Elliott, Sir William
Knox, David
Ridley, Hon Nicholas


Fairbairn, Nicholas
Lamont, Norman
Ridsdale, Julian


Fairgrieve, Russell
Lane, David
Rifkind, Malcolm


Farr, John
Langford-Holt, Sir John
Roberts, Michael (Cardiff NW)


Finsberg, Geoffrey
Lawson, Nigel
Roberts, Wyn (Conway)


Fisher, Sir Nigel
Le Marchant, Spencer
Ross, Stephen (Isle of Wight)


Fletcher, Alex (Edinburgh N)
Lester, Jim (Beeston)
Ross, William (Londonderry)


Fletcher-Cooke, Charles
Luce, Richard
Rossi, Hugh (Hornsey)


Fookes, Miss Janet
MacCormick, Iain
Rost, Peter (SE Derbyshire)


Fowler, Norman (Sutton C'f'd)
McCrindle, Robert
Sainsbury, Tim


Fox, Marcus
McCusker, H.
Scott, Nicholas


Fraser, Rt Hon H. (Stafford &amp; St)
Macfarlane, Neil
Shaw, Giles (Pudsey)


Gardner, Edward (S Fylde)
MacGregor, John
Shelton, William (Streatham)


Gilmour, Sir John (East Fife)
McNair-Wilson, P. (New Forest)





Shepherd, Colin
Steel, David (Roxburgh)
Viggers, Peter


Shersby, Michael
Steen, Anthony (Wavertree)
Wainwright, Richard (Colne V)


Silvester, Fred
Stewart, Ian (Hitchin)
Wakeham, John


Sims, Roger
Stradling Thomas, J.
Walker, Rt Hon p. (Worcester)


Sinclair, Sir George
Taylor, Teddy (Cathcart)
Weatherill, Bernard


Skeet, T. H. H.
Tebbit, Norman
Welsh, Andrew


Smith, Cyril (Rochdale)
Temple-Morris, Peter
Whitelaw, Rt Hon William


Smith, Dudley (Warwick)
Thatcher, Rt Hon Margaret
Wilson, Gordon (Dundee E)


Speed, Keith
Thomas, Rt Hon P. (Hendon S)
Winterton, Nicholas


Spence, John
Thompson, George
Young, Sir G. (Ealing, Acton)


Spicer, Michael (S Worcester)
Thorpe, Rt Hon Jeremy (N Devon)
Younger, Hon George


Sproat, Iain
Trotter, Neville



Stainton, Keith
Tugendhat, Christopher
TELLERS FOR THE AYES:


Stanbrook, Ivor
van Straubenzee, W. R.
Mr. John Pardoe and


Stanley, John
Vaughan, Dr Gerard
Mr. A. J. Beith.




NOES


Allaun, Frank
Evans, loan (Aberdare)
Mallalieu, J. P. W.


Anderson, Donald
Evans, John (Newton)
Marquand, David


Archer, Peter
Ewing, Harry (Stirling)
Marshall, Dr Edmund (Goole)


Armstrong, Ernest
Fernyhough, Rt Hon E.
Marshall, Jim (Leicester S)


Ashton, Joe
Fitch, Alan (Wigan)
Mason, Rt Hon Roy


Atkins, Ronald (Preston N)
Flannery, Martin
Maynard, Miss Joan


Atkinson, Norman
Fletcher, Ted (Darlington)
Mellish, Rt Hon Robert


Bagier, Gordon A. T.
Foot, Rt Hon Michael
Mikardo, Ian


Barnett, Guy (Greenwich)
Fowler, Gerald (The Wrekin)
Millan, Bruce


Barnett, Rt Hon Joel (Heywood)
Fraser, John (Lambeth, N'w'd)
Miller, Dr M. S. (E Kilbride)


Bates, Alf
Garrett, John (Norwich S)
Mitchell, R. C. (Soton, Itchen)


Bean, R. E.
Garrett, W. E. (Wallsend)
Molloy, William


Bennett, Andrew (Stockport N)
George, Bruce
Morris, Alfred (Wythenshawe)


Bishop, E. S.
Gilbert, Dr John
Morris, Charles R. (Openshaw)


Blenkinsop, Arthur
Golding, John
Mulley, Rt Hon Frederick


Boardman, H.
Gourlay, Harry
Murray, Rt Hon Ronald King


Booth, Albert
Graham, Ted
Newens, Stanley


Boothroyd, Miss Betty
Grant, George (Morpeth)
Noble, Mike


Bottomley, Rt Hon Arthur
Grant, John (Islington C)
Oakes, Gordon


Boyden, James (Bish Auck)
Hamilton, W. W. (Central Fife)
Ogden, Eric


Bray, Dr Jeremy
Hardy, Peter
O'Malley, Rt Hon Brian


Brown, Hugh D. (Provan)
Harper, Joseph
Orme, Rt Hon Stanley


Brown, Robert C. (Newcastle W)
Harrison, Walter (Wakefield)
Ovenden, John


Buchan, Norman
Hart, Rt Hon Judith
Owen, Dr David


Buchanan, Richard
Hatton, Frank
Palmer, Arthur


Callaghan, Rt Hon J. (Cardiff SE)
Hayman, Mrs Helene
Park, George


Callaghan, Jim (Middleton &amp; P)
Heffer, Eric S.
Parker, John


Campbell, Ian
Hooley, Frank
Pavitt, Laurie


Canavan, Dennis
Howell, Denis (B'ham, Sm H)
Phipps, Dr Colin


Carmichael, Neil
Hoyle, Doug (Nelson)
Prescott, John


Carter-Jones, Lewis
Huckfield, Les
Price, C. (Lewisham W)


Clemitson, Ivor
Hughes, Mark (Durham)
Price, William (Rugby)


Cocks, Michael (Bristol S)
Hughes, Robert (Aberdeen N)
Richardson, Miss Jo


Cohen, Stanley
Hughes, Roy (Newport)
Roberts, Albert (Normanton)


Coleman, Donald
Hunter, Adam
Roberts, Gwilym (Cannock)


Conlan, Bernard
Irvine, Rt Hon Sir A. (Edge Hill)
Roderick, Caerwyn


Cook, Robin F. (Edin C)
Irving, Rt Hon S. (Dartford)
Rodgers, George (Chorley)


Corbett, Robin
Jay, Rt Hon Douglas
Rodgers, William (Stockton)


Cox, Thomas (Tooting)
Jenkins, Rt Hon Roy (Stechford)
Rooker, J. W.


Craigen, J. M. (Maryhill)
John, Brynmor
Ross, Rt Hon W. (Kilmarnock)


Crawshaw, Richard
Jones, Alec (Rhondda)
Rowlands, Ted


Cronin, John
Jones, Barry (East Flint)
Ryman, John


Crosland, Rt Hon Anthony
Jones, Dan (Burnley)
Sandelson, Neville


Cryer, Bob
Kaufman, Gerald
Sedgemore, Brian


Cunningham, G. (Islington S)
Kerr, Russell
Selby, Harry


Cunningham, Dr J. (Whiteh)
Kilroy-Silk, Robert
Shaw, Arnold (Ilford South)


Dalyell, Tam
Kinnock, Neil
Sheldon, Robert (Ashton-u-Lyne)


Davidson, Arthur
Lambie, David
Short, Mrs Renée (Wolv NE)


Davies, Bryan (Enfield N)
Lamborn, Harry
Silkin, Rt Hon John (Deptford)


Davies, Denzil (Llanelli)
Lamond, James
Silkin, Rt Hon S. C. (Dulwich)


Davis, Clinton (Hackney C)
Leadbitter, Ted
Sillars, James


Deakins, Eric
Lee, John
Silverman, Julius


Dean, Joseph (Leeds W)
Lewis, Ron (Carlisle)
Skinner, Dennis


da Freitas, Rt Hon Sir Geoffrey
Lipton, Marcus
Small, William


Dempsey, James
Litterick, Tom
Smith, John (N Lanarkshire)


Doig, Peter
Lomas, Kenneth
Spearing, Nigel


Dormand, J. D.
Loyden, Eddie
Spriggs, Leslie


Duffy, A. E. P.
Lyon, Alexander (York)
Stallard, A. W.


Dunn, James A.
Lyons, Edward (Bradford W)
Stoddart, David


Dunnett, Jack
McCartney, Hugh
Stott, Roger


Dunwoody, Mrs Gwyneth
McElhone, Frank
Strang, Gavin


Edelman, Maurice
MacFarquhar, Roderick
Strauss, Rt Hon G. R.


Edge, Geoff
McGuire, Michael (Ince)
Taylor, Mrs Ann (Bolton W)


Ellis, John (Brigg &amp; Scun)
Mackenzie, Gregor
Thomas, Jeffrey (Abertillery)


Ellis, Tom (Wrexham)
McMillan, Tom (Glasgow C)
Thomas, Mike (Newcastle E)


English, Michael
Madden, Max
Thomas, Ron (Bristol NW)







Thorns, Stan (Preston South)
Watkinson, John
Wilson, William (Coventry SE)


Tinn, James
Weitzman, David
Wise, Mrs Audrey


Tomlinson, John
White, Frank B. (Bury)
Woodall, Alec


Torney, Tom
Whitlock, William
Woof, Robert


Urwin, T. W.
Williams, Alan (Swansea W)
Young, David (Bolton E)


Varley, Rt Hon Eric G.
Williams, Alan Lee (Hornch'ch)



Wainwright, Edwin (Dearne V)
Williams, Rt Hon Shirley (Hertford)
TELLERS FOR THE NOES


Walden, Brian (B'ham, L'dyw'd)
Williams, W. T. (Warrington)
Miss Margaret Jackson and


Walker, Harold (Doncaster)
Wilson, Alexander (Hamilton)
Mr, James Hamilton.


Ward, Michael
Wilson, Rt Hon H. (Huyton)

Question accordingly negatived.

Amendment proposed: No. 4 in page 2, leave out lines 32 and 33.—[Mr. Heseltine.]

Question put, That the amendment be made:—

The House divided: Ayes 199 Noes 223.

Division No. 253.]
AYES
19.16 p.m.


Aitken, Jonathan
Hall, Sir John
Mudd, David


Alison, Michael
Hall-Davis, A. G. F.
Neave, Alrey


Atkins, Rt Hon H. (Spelthorne)
Hamilton, Michael (Salisbury)
Nelson, Anthony


Awdry, Daniel
Hampson, Dr Keith
Neubert, Michael


Baker, Kenneth
Hannam, John
Newton, Tony


Banks Robert
Harvie Anderson, Rt Hon Miss
Nott, John


Beith, A. J.
Hastings, Stephen
Page, Rt Hon R. Graham (Crosby)


Bennett, Dr Reginald (Fareham)
Havers, Sir Michael
Pardoe, John


Benyon, W.
Hawkins, Paul
Parkinson, Cecil


Berry, Hon Anthony
Hayhoe, Barney
Pattie, Geoffrey


Biffen, John
Heseltine, Michael
Penhaligon, David


Boscawen, Hon Robert
Hicks, Robert
Percival, Ian


Bottomley, Peter
Holland, Philip
Pink, R. Bonner


Bowden, A. (Brighton, Kemptown)
Hordern, Peter
Powell, Rt Hon J. Enoch


Boyson, Dr Rhodes (Brent)
Howell, David (Guildford)
Prior, Rt Hon James


Braine, Sir Bernard
Howell, Ralph (North Norfolk)
Pym, Rt Hon Francis


Brotherton, Michael
Howelis, Geraint (Cardigan)
Rathbone, Tim


Brown, Sir Edward (Bath)
Hutchison, Michael Clark
Rawlinson, Rt Hon Sir Peter


Bryan, Sir Paul
Irvine, Bryant Godman (Rye)
Rees, Peter (Dover &amp; Deal)


Buchanan-Smith, Alick
James, David
Renton, Rt Hon Sir D. (Hunts)


Buck, Antony
Jenkin, Rt Hon P. (Wanst'd &amp; W'dt'd)
Renton, Tim (Mid-Sussex)


Budgen, Nick
Jessel, Toby
Ridley, Hon Nicholas


Bulmer, Esmond
Johnston, Russell (Inverness)
Ridsdale, Julian


Butler, Adam (Bosworth)
Jopling, Michael
Rifkind, Malcolm


Carlisle, Mark
Kaberry, Sir Donald
Roberts, Michael (Cardiff NW)


Chalker, Mrs Lynda
Kershaw, Anthony
Roberts, Wyn (Conway)


Churchill, W. S.
Kilfedder, James
Ross, Stephen (Isle of Wight)


Clarke, Kenneth (Rushcliffe)
King, Evelyn (South Dorset)
Ross, William (Londonderry)


Clegg, Walter
King, Tom (Bridgwater)
Rossi, Hugh (Hornsey)


Cockcroft, John
Kirk, Peter
Rost, Peter (SE Derbyshire)


Cooke, Robert (Bristol W)
Kitson, Sir Timothy
Sainsbury, Tim


Cope, John
Knight, Mrs Jill
Scott, Nicholas


Crouch, David
Knox, David
Snaw, Giles (Pudsey)


Crowder, F. P.
Lamont, Norman
Shelton, William (Streatham)


Davies, Rt Hon J. (Knutsford)
Lane, David
Shepherd, Colin


Dean, Paul (N Somerset)
Langford-Holt, Sir John
Shersby, Michael


Dodsworth, Geoffrey
Lawson, Nigel
Silvester, Fred


Douglas-Hamilton, Lord James
Lester, Jim (Beeston)
Sims, Roger


Drayson, Burnaby
McCrindle, Robert
Sinclair, Sir George


Durant, Tony
McCusker, H.
Skeet, T. H. H.


Dykes, Hugh
Macfarlane, Neil
Smith, Cyril (Rochdale)


Edwards, Nicholas (Pembroke)
MacGregor, John
Smith, Dudley (Warwick)


Elliott, Sir William
McNair-Wilson, P. (New Forest)
Speed, Keith


Fairbairn, Nicholas
Madel, David
Spence, John


Fairgrieve, Russell
Marshall, Michael (Arundel)
Spicer, Michael (S Worcester)


Farr, John
Marten, Neil
Sproat, Iain


Finsberg, Geoffrey
Mates, Michael
Stainton, Keith


Fisher, Sir Nigel
Mather, Carol
Stanbrook, Ivor


Fletcher, Alex (Edinburgh N)
Mawby, Ray
Stanley, John


Fletcher-Cooke, Charles
Maxwell-Hyslop, Robin
Steel, David (Roxburgh)


Fookes, Miss Janet
Mayhew, Patrick
Steen, Anthony (Wavertree)


Fowler, Norman (Sutton C'f'd)
Meyer, Sir Anthony
Stewart, Ian (Hitchin)


Fox, Marcus
Miller, Hal (Bromsgrove)
Stradling Thomas, J.


Fraser, Rt Hon H. (Stafford &amp; St)
Mills, Peter
Taylor, Teddy (Cathcart)


Gardner, Edward (S Fylde)
Miscampbell, Norman
Tebbit, Norman


Gilmour, Sir John (East Fife)
Mitchell, David (Basingstoke)
Temple-Morris, Peter


Goodhart, Philip
Moate, Roger
Thatcher, Rt Hon Margaret


Goodlad, Alastair
Molyneaux, James
Thomas, Rt Hon P. (Hendon S)


Gorst, John
Monro, Hector
Trotter, Neville


Gower, Sir Raymond (Barry)
Montgomery, Fergus
Tugendhat, Christopher


Gray, Hamish
Moore, John (Croydon C)
van Straubenzee, W. R.


Grimond, Rt Hon J.
Morris, Michael (Northampton S)
Vaughan, Dr Gerard


Grist, Ian
Morrison, Charles (Devizes)
Viggers, Peter


Grylls, Michael
Morrison, Hon Peter (Chester)
Wainwright, Richard (Colne V)




Wakeham, John
Winterton, Nicholas
TELLERS FOR THE AYES:


Walker, Rt Hon P. (Worcester)
Young, Sir G. (Ealing, Acton)
Mr. Spencer Le Marchant and


Weatherill, Bernard
Younger, Hon George
Mr. Richard Luce.


Whitelaw, Rt Hon William






NOES


Allaun, Frank
Garrett, W. E. (Wallsend)
O'Malley, Rt Hon Brian


Anderson, Donald
George, Bruce
Orme, Rt Hon Stanley


Archer, Peter
Gilbert, Dr John
Ovenden, John


Armstrong, Ernest
Golding, John
Owen, Dr David


Ashton, Joe
Gourlay, Harry
Palmer, Arthur


Atkins, Ronald (Preston H)
Graham, Ted
Park, George


Atkinson, Norman
Grant, George (Morpeth)
Parker, John


Bagier, Gordon A. T.
Grant, John (Islington C)
Pavitt, Laurie


Barnett, Guy (Greenwich)
Hamilton, James (Bothwell)
Phipps, Dr Colin


Barnett, Rt Hon Joel (Heywood)
Hamilton, W. W. (Central Fife)
Prescott, John


Bates, Alf
Hardy, Peter
Price, C. (Lewisham W)


Bean, R. E.
Harper, Joseph
Price, William (Rugby)


Bennett, Andrew (Stockport N)
Harrison, Walter (Wakefield)
Richardson, Miss Jo


Bishop, E. S.
Hart, Rt Hon Judith
Roberts, Albert (Normanton)


Blenkinsop, Arthur
Hatton, Frank
Roberts, Gwilym (Cannock)


Boardman, H.
Hayman, Mrs Helene
Roderick, Caerwyn


Booth, Albert
Heffer, Eric S.
Rodgers, George (Chorley)


Boothroyd, Miss Betty
Hooley, Frank
Rodgers, William (Stockton)


Bottomley, Rt Hon Arthur
Howell, Denis (B'ham, Sm H)
Rooker, J. W.


Boyden, James (Bish Auck)
Hoyle, Doug (Nelson)
Ross, Rt Hon W. (Kilmarnock)


Bray, Dr Jeremy
Huckfield, Les
Rowlands, Ted


Brown, Hugh D. (Provan)
Hughes, Mark (Durham)
Ryman, John


Brown, Robert C. (Newcastle W)
Hughes, Robert (Aberdeen N)
Sandelson, Neville


Buchan, Norman
Hughes, Roy (Newport)
Sedgemore, Brian


Buchanan, Richard
Hunter, Adam
Selby, Harry


Callaghan, Rt Hon J. (Cardiff SE)
Irvine, Rt Hon Sir A. (Edge Hill)
Shaw, Arnold (Word South)


Callaghan, Jim (Middleton &amp; P)
Irving, Rt Hon S. (Dartford)
Sheldon, Robert (Ashton-u-Lyne)


Campbell, Ian
Jay, Rt Hon Douglas
Short, Mrs Renee (Wolv NE)


Canavan, Dennis
Jenkins, Rt Hon Roy (Stechford)
Silkin, Rt Hon John (Deptford)


Carmichael, Neil
John, Brynmor
Silkin, Rt Hon S. C. (Dulwich)


Carter-Jones, Lewis
Jones, Alec (Rhondda)
Sillars, James


Clemitson, Ivor
Jones, Barry (East Flint)
Silverman, Julius


Cocks, Michael (Bristol S)
Jones Dan (Burnley)
Skinner, Dennis


Cohen, Stanley
Kaufman, Gerald
Small, William


Coleman, Donald
Kerr, Russell
Smith, John (N Lanarkshire)


Conlan, Bernard
Kilroy-Silk, Robert
Spearing, Nigel


Cook, Robin F. (Edin C)
Kinnock, Neil
Spriggs, Leslie


Corbett, Robin
Lambie, David
Stallard, A. W.


Craigen, J. M. (Maryhill)
Lamborn, Harry
Stoddart, David


Crawshaw, Richard
Lamond, James
Stott, Roger


Cronin, John
Leadbitter, Ted
Strang, Gavin


Crosland, Rt Hon Anthony
Lee, John
Strauss, Rt Hon G. R.


Cryer, Bob
Lewis, Ron (Carlisle)
Taylor, Mrs Ann (Bolton W)


Cunningham, G. (Islington S)
Lipton, Marcus
Thomas, Jeffrey (Abertillery)


Cunningham, Dr J. (Whiteh)
Litterick, Tom
Thomas, Mike (Newcastle E)


Dalyell, Tam
Lomas, Kenneth
Thomas, Ron (Bristol NW)


Davidson, Arthur
Loyden, Eddie
Thorne, Stan (Preston South)


Davies, Bryan (Enfield N)
Lyon, Alexander (York)
Tinn, James


Davies, Denzil (Llanelli)
Lyons, Edward (Bradford W)
Tomlinson, John


Davis, Clinton (Hackney C)
McCartney, Hugh
Torney, Tom


Deakins, Eric
McElhone, Frank
Urwin, T. W.


Dean, Joseph (Leeds W)
MacFarquhar, Roderick
Varley, Rt Hon Eric G.


de Freitas, Rt Hon Sir Geoffrey
McGuire, Michael (Ince)
Wainwright, Edwin (Dearne V)


Dempsey, James
Mackenzie, Gregor
Walden, Brian (B'ham, L'dyw'd)


Doig, Peter
McMillan, Tom (Glasgow C)
Walker, Harold (Doncaster)


Dormand, J. D.
Madden, Max
Ward, Michael


Duffy, A. E. P.
Mallalieu, J. P. W.
Watkinson, John


Dunn, James A
Marquand, David
Weitzman, David


Dunnett, Jack
Marshall, Dr Edmund (Goole)
White, Frank R. (Bury)


Dunwoody, Mrs Gwyneth
Marshall, Jim (Leicester S)
Whitlock, William


Edelman, Maurice
Mason, Rt Hon Roy
Williams, Alan (Swansea W)


Edge, Geoff
Maynard, Miss Joan
Williams, Alan Lee (Hornch'ch)


Ellis, John (Brigg &amp; Scun)
Mellish, Rt Hon Robert
Williams, Rt Hon Shirley (Hertford)


Ellis, Tom (Wrexham)
Mikardo, Ian
Williams, W. T. (Warrington)


English, Michael
Millan, Bruce
Wilson, Alexander (Hamilton)


Evans, Ioan (Aberdare)
Miller, Dr M. S. (E Kilbride)
Wilson, Rt Hon H. (Huyton)


Evans, John (Newton)
Mitchell, R. C. (Soton, Itchen)
Wilson, William (Coventry SE)


Ewing, Harry (Stirling)
Molloy, William
Wise, Mrs Audrey


Fernyhough, Rt Hon E.
Morris, Alfred (Wythenshawe)
Woodall, Alec


Fitch, Alan (Wigan)
Morris, Charles R. (Openshaw)
Woof, Robert


Flannery, Martin
Mulley, Rt Hon Frederick
Young, David (Bolton E)


Fletcher. Ted (Darlington)
Murray, Rt Hon Ronald King



Foot, Rt Hon Michael
Newens, Stanley
TELLERS FOR THE NOES:


Fowler, Gerald (The Wrekin)
Noble, Mike
Miss Margaret Jackson and


Fraser, John (Lambeth, N'w'd)
Oakes, Gordon
Mr. Thomas Cox.


Garrett, John (Norwich S)
Ogden, Eric

Amendment accordingly negatived.

Amendment proposed:

No. 5, in page 2, line 38, at end insert—
'(2A)(a) In any undertaking owned by the Board, the Board shall consult the employees as to the form of management they wish to see implemented;
(b) at any time trade union representatives of a majority of the employees in such an undertaking may require the Board to hold a ballot of all employees as to whether they wish to have the undertaking constituted as a workers' cooperative, and if the ballot shows a majority of the employees in favour of such a constitution, then the Board shall cooperate with the employees in its preparation, and shall implement it if a further ballot shows a majority of employees in favour of its implementation;
(c) the constitution of a workers' cooperative under this section shall provide for management by a worker representative body elected by all employees, for the payment of

interest on capital employed to the Board, for payment of depreciation into a reserve fund, for an employees' income stabilisation fund, and for the division of the income of the undertaking between employees after payment of interest, depreciation, taxes and other provisions, in accordance with a Code of Practice approved by the Secretary of State which the Secretary of State shall by order direct the Board and any worker cooperatives constituted under this section to observe;

(d) a duly constituted worker cooperative which fails to observe its obligations under the Code of Practice it shall revert to the managerial control of the Board.'.—[Dr Bray.]

Question put, That the amendment be made:—

The House divided: Ayes 72, Noes 336.

Division No. 254.]
AYES
[9.28 p.m.


Allaun, Frank
Hoyle, Doug (Nelson)
Rodgers, George (Chorley)


Ashton, Joe
Hughes, Roy (Newport)
Ross, Stephen (Isle of Wight)


Atkinson, Norman
Johnston, Russell (Inverness)
Sandelson, Neville


Bean, R. E.
Kerr, Russell
Sedgemore, Brian


Beith, A. J.
Kilroy-Silk, Robert
Selby, Harry


Bennett, Andrew (Stockport N)
Kinnock, Neil
Shaw, Arnold (Ilford South)


Buchan, Norman
Lambie, David
Short, Mrs Renée (Wolv NE)


Campbell, Ian
Leadbitter, Ted
Sillars, James


Canavan, Dennis
Lee, John
Silverman, Julius


Cook, Robin F. (Edin C)
Litterick, Tom
Skinner, Dennis


Corbett, Robin
Loyden, Eddie
Smith, Cyril (Rochdale)


Cryer, Bob
Madden, Max
Spearing, Nigel


Davies, Bryan (Enfield N)
Marshall, Jim (Leicester S)
Stallard, A. W.


Edge, Geoff
Maynard, Miss Joan
Steel, David (Roxburgh)


English, Michael
Mikardo, Ian
Taylor, Mrs Ann (Bolton W,


Evans, John (Newton)
Miller, Dr M. S. (E Kilbride)
Thorne, Stan (Preston South)


Fernyhough, Rt Hon E.
Newens, Stanley
Torney, Tom


Flannery, Martin
Noble, Mike
Wainwright, Richard (Colne V)


Fletcher, Ted (Darlington)
Ovenden, John
Wigley, Dafydd


Garrett, John (Norwich S)
Pardoe, John
Wilson, Alexander (Hamilton)


Grimond, Rt Hon J.
Penhaligon, David
Wise, Mrs Audrey


Hamilton, W. W. (Central Fife)
Prescott, John.



Hart, Rt Hon Judith
Richardson, Miss Jo
TELLERS FOR THE AYES:


Hatton, Frank
Roberts, Gwilym (Cannock)
Mr. Ron Thomas and


Heffer, Eric S.
Roderick, Caerwyn
Dr. Jeremy Bray.


Howells. Geraint (Cardigan)






NOES


Aitken, Jonathan
Bowden, A. (Brighton, Kemptown)
Cockcroft, John


Alison, Michael
Boyden, James (Bish Auck)
Cocks, Michael (Bristol S)


Archer, Peter
Boyson, Dr Rhodes (Brent)
Cohen, Stanley


Armstrong, Ernest
Braine, Sir Bernard
Coleman, Donald


Atkins, Rt Hon H. (Spelthorne)
Brotherton, Michael
Conlan, Bernard


Atkins. Ronald (Preston N)
Brown, Sir Edward (Bath)
Cooke, Robert (Bristol W)


Awdry, Daniel
Brown, Hugh D. (Provan)
Cope, John


Bagier, Gordon A. T
Brown, Robert C. (Newcastle W)
Cox, Thomas (Tooting)


Baker, Kenneth
Bryan, Sir Paul
Craigen, J. M. (Maryhill)


Banks, Robert
Buchanan, Richard
Crawshaw, Richard


Barnett, Guy (Greenwich)
Buchanan-Smith, Alick
Cronin, John


Barnett, Rt Hon Joel (Heywood)
Buck, Antony
Crosland. Rt Hon Anthony


Bates, Alf
Budgen, Nick
Crouch, David


Bennett, Dr Reginald (Fareham)
Bulmer, Esmond
Crowder, F. P.


Benyon, W.
Butler, Adam (Bosworth)
Cunningham, G. (Islington S)


Berry, Hon Anthony
Callaghan, Rt Hon J. (Cardiff SE)
Cunningham, Dr J. (Whiteh)


Biffen, John
Callaghan, Jim (Middleton &amp; P)
Dalyell, Tam


Bishop, E. S.
Carlisle, Mark
Davidson, Arthur


Blenkinsop, Arthur
Carmichael, Neil
Davies, Denzil (Llanelli)


Boardman, H.
Carter-Jones, Lewis
Davies, Rt Hon J. (Knutsford)


Booth, Albert
Chalker, Mrs Lynda
Davis, Clinton (Hackney C)


Boothroyd, Miss Betty
Churchill, W. S.
Deakins, Eric


Boscawen, Hon Robert
Clarke, Kenneth (Rushcliffe)
Dean, Joseph (Leeds W)


Bottomley, Rt Hon Arthur
Clegg, Walter
de Freitas, Rt Hon Sir Geoffrey


Bottomley, Peter
Clemitson, Ivor
Dempsey, James




Dodsworth, Geoffrey
Kaberry, Sir Donald
Price, C. (Lewisham W)


Doig, Peter
Kaufman, Gerald
Price, William (Rugby)


Douglas-Hamilton, Lord James
Kershaw, Anthony
Prior, Rt Hon James


Drayson, Burnaby
Kilfedder, James
Pym, Rt Hon Francis


Duffy, A. E. P.
King, Evelyn (South Dorset)
Rathbone, Tim


Dunn, James A.
King, Tom (Bridgwater)
Rawlinson, Rt Hon Sir Peter


Dunnett, Jack
Kirk, Peter
Rees, Peter (Dover &amp; Deal)


Dunwoody, Mrs Gwyneth
Kitson, Sir Timothy
Renton, Rt Hon Sir D. (Hunts)


Durant, Tony
Knight, Mrs Jill
Renton, Tim (Mid-Sussex)


Edelman, Maurice
Knox, David
Ridley, Hon Nicholas


Edwards, Nicholas (Pembroke)
Lamborn, Harry
Ridsdale, Julian


Elliott, Sir William
Lamond James
Rifkind, Malcolm


Ellis, John (Brigg &amp; Scun)
Lamont, Norman
Roberts, Albert (Normanton)


Ellis, Tom (Wrexham)
Lane, David
Roberts, Michael (Cardiff NW)


Ewing, Harry (Stirling)
Langford-Holt, Sir John
Roberts, Wyn (Conway)


Fairbairn, Nicholas
Le Marchant, Spencer
Rodgers, William (Stockton)


Fairgrieve, Russell
Lester, Jim (Beeston)
Rooker, J. W.


Farr, John
Lewis, Ron (Carlisle)
Ross, Rt Hon W. (Kilmarnock)


Finsberg, Geoffrey
Lipton, Marcus
Rossi, Hugh (Hornsey)


Fisher, Sir Nigel
Lomas, Kenneth
Rost, Peter (SE Derbyshire)


Fitch, Alan (Wigan)
Luce, Richard
Rowlands, Ted


Fletcher, Alex (Edinburgh N)
Lyon, Alexander (York)
Ryman, John


Fletcher-Cooke, Charles
Lyons, Edward (Bradford W)
Sainsbury, Tim


Fookes, Miss Janet
McCartney, Hugh
Scott, Nicholas


Foot, Rt Hon Michael
McCrindle, Robert
Shaw, Giles (Pudsey)


Fowler, Gerald (The Wrekin)
McElhone, Frank
Sheldon, Robert (Ashton u-Lyne>


Fowler, Norman (Sutton C'f'd)
Macfarlane, Neil
Shelton, William (Streatham)


Fox, Marcus
MacFarquhar, Roderick
Shepherd, Colin


Fraser, Rt Hon H. (Stafford &amp; St)
MacGregor, John
Shersby, Michael


Fraser, John (Lambeth, N'w'd)
McGuire, Michael (Ince)
Silkful, Rt Hon John (Deptford)


Gardner, Edward (S Fylde)
Mackenzie, Gregor
Silkin, Rt Hon S. C. (Dulwich)


Garrett, W. E. (Wallsend)
McMillan, Tom (Glasgow C)
Silvester, Fred


George, Bruce
McNair-Wilson, P. (New Forest)
Sims, Roger


Gilbert, Dr John
Madel, David
Sinclair, Sir George


Gilmour, Sir John (East Fife)
Mallalieu, J. P. W
Skeet, T. H. H.


Golding, John
Marks, Kenneth
Small, William


Goodhart, Philip
Marquand, David
Smith, Dudley (Warwick)


Goodlad, Alastair
Marshall, Dr Edmund (Goole)
Smith, John (N Lanarkshire)


Gorst, John
Marshall, Michael (Arundel)
Speed, Keith


Gower, Sir Raymond (Barry)
Marten, Neil
Spence, John


Graham, Ted
Mates, Michael
Spicer, Michael (S Worcester)


Grant, George (Morpeth)
Mather, Carol
Spriggs, Leslie


Grant, John (Islington C)
Maxwell-Hyslop, Robin
Sproat, Iain


Gray, Hamish
Mayhew, Patrick
Stainton, Keith


Grylls, Michael
Mellish, Rt Hon Robert
Stanbrook, Ivor


Hall, Sir John
Meyer, Sir Anthony
Stanley, John


Hall-Davis, A. G. F.
Millan, Bruce
Steen, Anthony (Wavertree)


Hamilton, James (Bothwell)
Miller, Hal (Bromsgrove)
Stewart, Ian (Hitchin)


Hampson, Dr Keith
Mills, Peter
Stoddart, David


Hannam, John
Miscampbell, Norman
Stott, Roger


Hardy, Peter
Mitchell, David (Basingstoke)
Stradling Thomas, J.


Harper, Joseph
Mitchell, R. C. (Soton, Itchen)
Strang, Gavin


Harrison, Walter (Wakefield)
Moate, Roger
Strauss, Rt Hon G. R.


Harvie Anderson, Rt Hon Miss
Molloy, William
Taylor, Teddy (Cathcart)


Hastings, Stephen
Monro, Hector
Tebbit, Norman


Havers, Sir Michael
Montgomery, Fergus
Temple-Morris, Peter


Hawkins, Paul
Moore, John (Croydon C)
Thatcher, Rt Hon Margaret


Hayhoe, Barney
Morris, Alfred (Wythenshawe)
Thomas, Jeffrey (Abertillery)


Hayman, Mrs Helene
Morris, Charles R. (Openshaw)
Thomas, Mike (Newcastle E)


Heseltine, Michael
Morris, Michael (Northampton S)
Thomas, Rt Hon P. (Hendon S'


Hicks, Robert
Morrison, Charles (Devizes)
Tinn, James


Holland, Philip
Morrison, Hon Peter (Chester)
Tomlinson, John


Hooley, Frank
Mudd, David
Trotter, Neville


Hordern, Peter
Mulley, Rt Hon Frederick
Tugendhat, Christopher


Howell, David (Guildford)
Murray, Rt Hon Ronald King
Urwin, T. W.


Howell. Denis (B ham, Sm H)
Neave, Alrey
van Straubenzee, W. R.


Howell, Ralph (North Norfolk)
Nelson, Anthony
Varley, Rt Hon Eric G.


Huckfield, Les
Neubert, Michael
Vaughan, Dr Gerard


Hughes, Mark (Durham)
Newton, Tony
Viggers, Peter


Hughes, Robert (Aberdeen N)
Oakes, Gordon
Wainwright, Edwin (Dearne V)


Hunter, Adam
Ogden, Eric
Wakeham, John


Hutchison, Michael Clark
O'Malley, Rt Hon Brian
Walden, Brian (B'ham, L'dyw'd)


Irvine, Rt Hon Sir A. (Edge Hill)
Orme, Rt Hon Stanley
Walker, Harold (Doncaster)


Irvine, Bryant Godman (Rye)
Owen, Dr David
Walker, Rt Hon P. (Worcester)


Irving, Rt Hon S. (Dartford)
Page, Rt Hon R, Graham (Crosby)
Ward, Michael


James, David
Palmer, Arthur
Weatherill, Bernard


Jay, Rt Hon Douglas
Park, George
Weitzman, David


Jenkin, Rt Hon P. (Wanst'd &amp; W'dt'd)
Parker, John
White, Frank R. (Bury)


Jenkins, Rt Hon Roy (Stechford)
Parkinson, Cecil
Whitelaw, Rt Hon William


Jessel, Toby
Pattie, Geoffrey
Whitlock, William


John, Brynmor
Pavitt, Laurie
Williams, Alan (Swansea W)


Jones, Alec (Rhondda)
Percival, Ian
Williams, Alan Lee (Hornch'ch)


Jones, Barry (East Flint)
Phipps, Dr Colin
Williams, Rt Hon Shirley (Hertford)


Jones, Dan (Burnley)
Pink, R. Bonner
Williams, W. T. (Warrington)


Jopling, Michael

Wilson, William (Coventry SE)







Winterton, Nicholas
Young, David (Bolton E)
TELLERS FOR THE NOES:


woodall, Alec
Young, Sir G. (Ealing, Acton)
Miss Margaret Jackson and


Woof, Robert
Younger, Hon George
Mr. J. D. Dormand.


Wrigglesworth, Ian

Question accordingly negatived.

It being after half-past Nine o'clock Mr. DEPUTY SPEAKER proceeded pursuant to Standing Order No. 43, (Business Committee) and the Orders [12th May and this day] to put forthwith the Questions on amendments moved by a Member of the Government, of which notice had been given, to that part of the Bill to be concluded at half-past Nine o'clock.

Mr. Deputy Speaker (Sir Myer Galpern): It is now my duty to put the Question on all Government amendments up to the end of Schedule 2.
To save the time of the House, it the House is willing, I propose to put the Questions in blocks of amendments, singling out only those individual amendments on which hon. Members wish to divide. Is that agreed?
I had understood that some hon. Members wished to divide on Amendment No. 179 but no longer wish to do so.
Does any hon. Member wish to divide on any earlier Government amendment? If not, I put formally the Question on Government amendments up to and including Amendment No. 34.

Amendments made:

No. 7, in page 3, line 10, at end insert 'and other property'.

No. 8, in page 3, line 11, at end insert 'and other property'.—[Mr. Varley.]

Clause 3

EXERCISE BY BOARD OF POWERS TO GIVE SELECTIVE FINANCIAL ASSISTANCE UNDER INDUSTRY ACT 1972

Amendments made:

No. 10, in page 3, line 20, leave out from beginning to 8 in line 21 and insert:
'in any case where it appears to the Secretary of State that the powers conferred on him by the powers conferred on him by section 7 or'

No. 11, in page 3, line 22, leave out 'may be exercised by the Board' and insert:
'are exercisable and ought to be exercised, the Secretary of State, with the consent of the Treasury, may direct the Board to exercise them and the Board shall not require the

consent of the Treasury to the exercise of any such powers in pursuance of such a direction'.

No. 12, in page 3, line 24, leave out subsection (2).

No. 13, in page 3, line 39, at end insert: 'but nothing in a subsequent direction shall relieve the Board of a contractual liability to which they are subject in consequence of an earlier direction'.

No. 14, in page 3, line 39, at end insert:
'(6A) as soon as practicable after the Secretary of State has given a direction under this section he shall lay before each House of Parliament a statement specifying—

(a) the amount of assistance that the Board are to give in pursuance of the direction;
(b) how and to whom they are to give it; and
(c) where it is to be given under section 7 of the Industry Act 1972, the assisted area in which the undertaking for which it is provided is or will be situated.'.

No. 16, in page 3, line 40, leave out 'set out any direction' and insert:
'specify any direction that has been'.

No. 17, in page 3, line 41, at end insert:
'and give the information concerning it that is required to be specified in a statement under subsection (6A) above,'.

No. 18, in page 3, line 41, at end insert:
'(7A) In any case where the Board are exercising the Secretary of State's powers in pursuance of a direction under this section, sections 7(4) and 8(3)(a) of the Industry Act 1972 (each of which requires the consent of a company to the acquisition of its shares or stock) shall be construed, notwithstanding the fact that the direction has been given, as requiring the Secretary of State (and not the Board) to obtain the consent.'.

No. 19, in page 4, line 34, at end add—
'(15A) It is hereby declared that nothing in this section affects—

(a) the power conferred on the Secretary of State by subsection (7) of section 8 of the Industry Act 1972 (power to increase the limit on financial assistance under that section), or
(b) the duty imposed on him by subsection (8) of that section (duty to obtain a resolution of the House of Commons for assistance in excess of £5 million),
or confers or imposes any corresponding power or duty on the Board.'.—[Mr. Varley.]

Clause 4

TRANSFER OF PUBLICLY OWNED PROPERTY TO BOARD

Amendments made:

No. 20, in page 4, line 35, at beginning insert:
'Subject to subsection (2) below,'.

No. 21, in page 4, line 38, after 'Board', insert 'or the Board's nominees'.

No. 22, in page 4, line 39, at end insert:
'(2) Publicly-owned securities and other publicly-owned property may only be transferred to the Board or the Board's nominees with the consent of the Secretary of State or in accordance with any general authority given by the Secretary of State.
(3) The Secretary of State shall lay before each House of Parliament a copy of any general authority given by him under subsection (2) above'.

No. 23, in page 4, line 39, at end insert:
'(3) When the Secretary of State has given a consent under subsection (2) above and the consideration for the transfer exceeds £1 million, he shall lay before each House of Parliament a statement specifying—

(a) the securities or other property to be transferred;
(b) the transferor;
(c) the consideration; and
(d) the date of his consent'.—[Mr. Varley.]

Clause 6

GENERAL POWER OF SECRETARY OF STATE TO GIVE BOARD DIRECTIONS

Amendment made:

No. 26, in page 5, line 20, at end insert:
'(2A) Subject to paragraph 8(3) of Schedule 2 below, when the Secretary of State gives a direction under this section, he shall either—

(a) lay a copy of the direction before each House of Parliament within 28 days of giving it; or
(b) lay a copy later, but lay with it a statement of the reason why a copy was not laid within 28 days'.—[Mr. Varley.]

Clause 8

OTHER LIMITS ON BOARD'S POWERS

Amendments made:

No. 34, in page 6, line 20, leave out 'wholly owned'.

No. 179, in page 6, line 22, leave out 'without the consent of' and insert:
'except with the consent of the Secretary of State or in accordance with any general authority given by'.—[Mr. Varley.]

New Clause 2

THE BOARD AND THE MEDIA

'(1) Subject to subsecton (2) below, neither the Board nor any of the Board's subsidiaries—

(a) shall commence a business of publishing newspapers, magazines or other periodicals for sale to the public in the United Kingdom; or
(b) enter into any contract with the Independent Broadcasting Authority for the provision of programmes.

(2) Subsection (1) above does not apply to periodicals wholly or mainly concerned with the activities of the Board or any of the Board's subsidiaries.

(3) Subject to subsection (4) below, neither the Board nor any of the Board's subsidiaries shall acquire any of the share capital of a body corporate if a substantial part of the under-taking—

(a) of that body corporate, or
(b) of a group of companies of which it is the holding company,
consists of carrying on—

(i) a business such as is mentioned in paragraph (a) of subsection (1) above, or
(ii) the activities of a programme contractor.

(4) Subsection (3) above shall not prevent the acquisition of share capital of a body corporate if the acquisition is made in pursuance of a direction under section 3 above.

(5) Subject to subsections (7) and (8) below, if the Board or any of the Board's subsidiaries acquire any of the share capital of a body corporate which carries on any such business as is mentioned in subsection (1)(a) above, it shall be their duty to exercise their voting power with a view to securing that the body corporate disposes of the business as soon as practicable.

(6) Subject to subsections (7) and (8) below, if the Board or any of the Board's subsidiaries acquire any of the share capital of a body corporate which has any interest, direct or indirect, in a body corporate which carries on such a business, it shall be their duty to exercise their voting power with a view to securing that the capital of the body corporate which carries on that business is disposed of as soon as practicable.

(7) The Secretary of State, by direction under section 6 above, may release the Board—

(a) from any duty imposed on them by subsection (5) or (b) above;
(b) from any duty to ensure that one of their subsidiaries performs any duty imposed on that subsidiary by either of those subsections.

(8) The Secretary of State may only give such a direction as is mentioned in subsection (7)


above if he is of the opinion that without such a direction serious commercial injury would be caused to any newspaper, magazine or periodical concerned.

(9) If the Board or any of the Board's subsidiaries acquire any of the share capital of a body corporate which is a programme contractor, they shall consult the Independent Broadcasting Authority as to the steps that they are to take with regard to that share capital and obey any direction given by that Authority.

(10) Without prejudice to the foregoing provisions of this section, it shall be the duty of the Board and of any of the Board's subsidiaries to use any power to control or influence the carrying on of a business such as is

mentioned in paragraph (a) of subsection (1) above or of activities such as are mentioned in paragraph (b) of that subsection only in relation to financial or commercial matters.

(11) In this section "programme contractor" has the meaning assigned to it by section 2(3) of the Independent Broadcasting Authority Act 1973.—[Mr. Varley.]

Brought up, and read.

Motion made, and Question put, That the clause be added to the Bill:—

The House divided: Ayes 332, Noes 66.

Division No. 255.]
AYES
[9.42 p.m.


Alison, Michael
Cunningham, G. (Islington S)
Hardy, Peter


Archer, Peter
Cunningham, Dr J. (Whiten)
Harrison, Walter (Wakefield)


Armstrong, Ernest
Dalyell, Tarn
Harvie Anderson, Rt Hon Miss


Atkins, Rt Hon H. (Spalthorne)
Davidson, Arthur
Hastings, Stephen


Awdry, Daniel
Davies, Denzil (Llanelli)
Havers, Sir Michael


Bagier, Gordon A. T.
Davies, Rt Hon J. (Knutsford)
Hayhoe, Barney


Bain, Mrs Margaret
Davis, Clinton (Hackney C)
Hayman, Mrs Helene


Baker, Kenneth
Deakins, Eric
Henderson, Douglas


Banks, Robert
Dean, Joseph (Leeds W)
Heseltine, Michael


Barnett, Rt Hon Joel (Heywood)
Dean, Paul (N Somerset)
Hicks, Robert


Bates, All
de Freitas, Rt Hon Sir Geoffrey
Holland, Philip


Bean, R. E.
Dempsey, James
Hooley, Frank


Beith, A. J.
Dodsworth, Geoffrey
Hordern, Peter


Bennett, Dr Reginald (Fareham)
Doig, Peter
Howell, David (Guildford)


Benyon, W.
Douglas-Hamilton, Lord James
Howell, Denis (B'ham, Sm H)


Biffen, John
Drayson, Burnaby
Howell, Ralph (North Norfolk)


Bishop, E. S.
Duffy, A. E. P.
Howells, Geraint (Cardigan)


Blenkinsop, Arthur
Dunn, James A.
Huckfield, Les


Boardman, H.
Dunnett, Jack
Hughes, Mark (Durham)


Booth, Albert
Durant, Tony
Hughes, Robert (Aberdeen N)


Boothroyd, Miss Betty
Dykes, Hugh
Hunter, Adam


Boscawen, Hon Robert
Edelman, Maurice
Hutchison, Michael Clark


Bottomley, Rt Hon Arthur
Edwards, Nicholas (Pembroke)
Irvine, Rt Hon Sir A. (Edge Hill)


Bottomley, Peter
Elliott, Sir William
Irvine, Bryant Godman (Rye)


Bowden, A. (Brighton, Kemptown)
Ellis, John (Brigg &amp; Scun)
Irving, Rt Hon S. (Dartford)


Boyden, James (Bish Auck)
Ellis, Tom (Wrexham)
Jackson, Miss Margaret (Lincoln)


Boyson, Dr Rhodes (Brent)
English, Michael
James, David


Braine, Sir Bernard
Ewing, Harry (Stirling)
Jay, Rt Hon Douglas


Brotherton, Michael
Fairbairn, Nicholas
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)


Brown, Sir Edward (Bath)
Fairgrieve, Russell
Jessel, Toby


Brown, Hugh D. (Provan)
Farr, John
John, Brynmor


Brown, Robert C. (Newcastle W)
Finsberg, Geoffrey
Johnston, Russell (Inverness)


Bryan, Sir Paul
Fisher, Sir Nigel
Jones, Alec (Rhondda)


Buchanan, Richard
Fitch, Alan (Wigan)
Jones, Barry (East Flint)


Buchanan-Smith, Alick
Fletcher, Alex (Edinburgh N)
Jones. Dan (Burnley)


Budgen, Nick
Fookes, Miss Janet
Jopling, Michael


Bulmer. Esmond
Foot, Rt Hon Michael
Kaufman, Gerald


Butler, Adam (Bosworth)
Fowler, Gerald (The Wrekin)
Kilfedder, James


Callaghan, Rt Hon J. (Cardiff SE)
Fowler, Norman (Sutton C'f'd)
King, Evelyn (South Dorset)


Campbell, Ian
Fox, Marcus
King, Tom (Bridgwater)


Carlisle, Mark
Fraser, Rt Hon H. (Stafford &amp; St)
Kirk, Peter


Carmichael, Neil
Fraser, John (Lambeth, N'w'd)
Kitson, Sir Timothy


Carter-Jones, Lewis
Gardner, Edward (S Fylde)
Knight, Mrs Jill


Chalker, Mrs Lynda
George, Bruce
Knox, David


Churchill, W. S.
Gilbert, Dr John
Lamborn, Harry


Clarke, Kenneth (Rushcliffe)
Gilmour, Sir John (East Fife)
Lamont, Norman


Clegg, Walter
Golding, John
Lane, David


Clemitson, Ivor
Goodhart, Philip
Lawson, Nigel


Cockcroft, John
Goodlad, Alastair
Lester, Jim (Beeston)


Cocks, Michael (Bristol S)
Gourlay, Harry
Lewis, Ron (Carlisle)


Cohen, Stanley
Gower, Sir Raymond (Barry)
Lipton, Marcus


Coleman, Donald
Graham, Ted
Lomas, Kenneth


Cooke, Robert (Bristol W)
Grant, George (Morpeth)
Luce, Richard


Cope, John
Grant, John (Islington C)
Lyon, Alexander (York)


Cox, Thomas (Tooting)
Gray, Hamish
Lyons, Edward (Bradford W)


Craigen. J. M. (Maryhill)
Grimond, Rt Hon J.
MacCormick, Iain


Crawford, Douglas
Grylls, Michael
McCrindle, Robert


Crawshaw, Richard
Hall, Sir John
McElhone, Frank


Cronin, John
Hall-Davis, A. G. F.
Macfarlane, Neil


Crosland, Rt Hon Anthony
Hamilton, James (Bothwell)
MacFarquhar, Roderick


Crouch, David
Hampson, Dr Keith
MacGregor, John


Crowder, F. P.
Hannam, John
McGuire, Michael (Ince)




Mackenzie, Gregor
Parkinson, Cecil
Stanley, John


McMillan, Tom (Glasgow C)
Pattie, Geoffrey
Steel, David (Roxburgh)


McNair-Wilson, P. (New Forest)
Pavitt, Laurie
Stewart, Ian (Hitchin)


Madel, David
Penhaligon, David
Stewart, Rt Hon M. (Fulham)


Mallalieu, J. P. W
Percival, Ian
Stoddart, David


Marks, Kenneth
Phipps, Dr Colin
Stott, Roger


Marquand, David
Pink, R. Bonner
Stradling Thomas, J.


Marshall, Dr Edmund (Goole)
Price, William (Rugby)
Strang, Gavin


Marshall, Michael (Arundel)
Pym, Rt Hon Francis
Strauss, Rt Hon G. R.


Marten, Neil
Rathbone, Tim
Taylor, Teddy (Cathcart)


Mason, Rt Hon Roy
Rawlinson, Rt Hon Sir Peter
Tebbit, Norman


Mates, Michael
Rees, Peter (Dover &amp; Deal)
Temple-Morris, Peter


Mawby, Ray
Reid, George
Thatcher, Rt Hon Margaret


Maxwell-Hyslop, Robin
Renton, Rt Hon Sir D. (Hunts)
Thomas, Jeffrey (Abertillery)


Mayhew, Patrick
Renton, Tim (Mid-Sussex)
Thomas, Rt Hon P. (Hendon S)


Mellish, Rt Hon Robert
Ridley, Hon Nicholas
Tinn, James


Meyer, Sir Anthony
Ridsdale, Jullan
Tomlinson, John


Millan, Bruce
Rifkind, Malcolm
Trotter, Neville


Miller, Hal (Bromsgrove)
Roberts, Albert (Normanton)
Tugendhat, Christopher


Mills, Peter
Roberts, Michael (Cardiff NW)
Urwin, T. W.


Miscampbell, Norman
Roberts, Wyn (Conway)
van Straubenzee, W. R.


Mitchell, David (Basingstoke)
Rodgers, William (Stockton)
Varley, Rt Hon Eric G.


Mitchell, R. C. (Soton, Itchen)
Rooker, J. W.
Vaughan, Dr Gerard


Moate, Roger
Ross, Stephen (Isle of Wight)
Viggers, Peter


Monro, Hector
Ross, Rt Hon W. (Kilmarnock)
Wainwright, Edwin (Dearne V)


Montgomery, Fergus
Rossi, Hugh (Hornsey)
Wainwright, Richard (Colne V)


Moore, John (Croydon C)
Rowlands, Ted
Walden, Brian (B'ham, L'dyw'd)


Morris, Alfred (Wythenshawe)
Ryman, John
Walker, Harold (Doncaster)


Morris, Charles R. (Openshaw)
Sainsbury, Tim
Ward, Michael


Morris, Michael (Northampton S)
Sandelson, Neville
Weatherill, Bernard


Morrison, Charles (Devizes)
Shaw, Giles (Pudsey)
Weitzman, David


Morrison, Hon Peter (Chester)
Sheldon, Robert (Ashton-u-Lyne)
White, Frank R. (Bury)


Mudd, David
Shelton, William (Streatham)
Whiteiaw, Rt Hon William


Mulley, Rt Hon Frederick
Shepherd, Colin
Whitlock, William


Murray, Rt Hon Ronald King
Shersby, Michael
Wigley, Dafydd


Neave, Airey
Silkin, Rt Hon John (Deptford)
Williams, Alan (Swansea W)


Nelson, Anthony
Silkin, Rt Hon S. C. (Dulwich)
Williams, Alan Lee (Hornch'ch)


Neubert, Michael
Silvester, Fred
Williams, Rt Hon Shirley (Hertford)


Newton, Tony
Sims, Roger
Williams, W. T. (Warrington)


Nott, John
Sinclair, Sir George
Wilson, Gordon (Dundee E)


Oakes, Gordon
Skeet, T. H. H.
Wilson, William (Coventry SE)


Ogden, Eric
Small, William
Winterton, Nicholas


O'Malley, Rt Hon Brian
Smith, Cyril (Rochdale)
Woodall, Alec


Orme, Rt Hon Stanley
Smith, Dudley (Warwick)
Wrigglesworth, Ian


Owen, Dr David
Smith, John (N Lanarkshire)
Young, Sir G. (Ealing, Acton)


Page, Rt Hon R. Graham (Crosby)
Speed, Keith
Younger, Hon George


Palmer, Arthur
Spence, John



Pardoe, John
Spicer, Michael (S Worcester)
TELLERS FOR THE AYES:


Park, George
Sproat, Iain
Mr. Joseph Harper and


Parker, John
Stanbrook, Ivor
Mr. J. D. Dormand.




NOES


Allaun, Frank
Hatton, Frank
Roberts, Gwilym (Cannock)


Ashton, Joe
Heffer, Eric S.
Roderick, Caerwyn


Atkins, Ronald (Preston N)
Hoyle, Doug (Nelson)
Rodgers, George (Choriey)


Atkinson, Norman
Hughes, Roy (Newport)
Sedgemore, Brian


Barnett, Guy (Greenwich)
Kilroy-Silk, Robert
Selby, Harry


Bennett, Andrew (Stockport N)
Kinnock, Neil
Short, Mrs Renée (Wolv NE)


Bray, Dr Jeremy
Lambie, David
Sillars, James


Buchan, Norman
Lamond, James
Skinner, Dennis


Callaghan, Jim (Middleton &amp; P)
Lee, John
Spriggs, Leslie


Canavan, Dennis
Litterick, Tom
Stallard, A. W.


Cook, Robin F. (Edin C)
McCartney, Hugn
Taylor, Mrs Ann (Bolton W)


Corbett, Robin
Madden, Max
Thomas, Ron (Bristol NW)


Cryer, Bob
Marshall, Jim (Leicester S)
Thorne, Stan (Preston South)


Davies, Bryan (Enfield N)
Maynard, Miss Joan
Torney, Tom


Edge, Geoff
Mikardo, Ian
Watkinson, John


Evans, Ioan (Aberdare)
Miller, Dr M. S. (E Kilbride)
Wilson, Alexander (Hamilton)


Evans, John (Newton)
Molloy, William
Wise, Mrs Audrey


Fernyhough, Rt Hon E.
Newens, Stanley
Woof, Robert


Flannery, Martin
Noble, Mike
Young, David (Bolton E)


Fletcher, Ted (Darlington)
Ovenden, John



Garrett, John (Norwich S)
Prescott, John
TELLERS FOR THE NOES:


Garrett, W. E. (Wallsend)
Price, C. (Lewisham W)
Mr. Russell Kerr and


Hamilton, W. W. (Central Fife)
Richardson, Miss Jo
Mr. Eddie Loyden.


Hart, Rt Hon Judith

Question accordingly agreed to.

Clause added to the Bill.

Schedule 1

THE NATIONAL ENTERPRISE BOARD

Amendments made:

No. 124, in page 29, line 13, at end insert:

'Acquisition of holdings of minority shareholders

18A. Section 209 of the Companies Act 1948 (power to acquire shares of shareholders dissenting from scheme or contract approved by majority) shall have effect in relation to the transfer of shares or any class of shares in a company to the Board; and references to a transferee company in that section shall be construed accordingly'.

No. 125, in page 29, line 30, at end insert:
'(3) If a report so laid sets out a direction under section 6 above a copy of which has not been laid in accordance with subsection (2A) of that section, a statement of the reason why the copy was not so laid shall be annexed to the Board's report by the Secretary of State, and the said subsection (2A) shall not apply to the direction'.—[Mr. Varley.]

Clause 9

GENERAL EXTENT OF POWERS IN RELATION TO CONTROL OF IMPORTANT MANUFACTURING UNDERTAKINGS

Mr. Wigley: I beg to move Amendment No. 167, in page 7, line 2, after 'manufacturing' insert 'extraction or service'.
I shall not detain the House for long. This is an amendment which presented itself in many forms in Committee. The basis of the amendment is that there are many spheres of activity, other than manufacturing activity, where powers may be necessary to safeguard the employment situation in certain areas. This provision should appeal to the Government in the context of regional development programmes.
In the context of extractive industry one thinks of the development of such things as gravel pits and mineral resources, which certainly exist in areas such as mine where there has not been any coherent attempt at developing them in the private sector. Without a shadow of doubt these industries have an economic potential. In my constituency the Gwynedd County Council has shown positive interest in wanting to develop

these industries in the public sector, but it has been precluded from doing so because of the rules under which it operates.
If the NEB and, in the case of Scotland and Wales, the development agencies, are to play an active role in the context of the extractive industries, many of the powers in Clause 2 should also be effective for the extractive as well as the manufacturing concerns. The same is true to some extent in the service sector. There are instances in the service sector, particularly in the tourist trade, where there is a need for specific initiatives by public authorities, and in this case by the NEB, to develop the tourist trade and to bring the maximum possible benefit to areas such as mine—areas of high unemployment and low job opportunity. Such areas can benefit considerably economically from such development.
Amendment No. 167 is put forward because it brings the matter home in the most relevant way in the context of the transfer of control of important concerns to non-residents. If this is true in the manufacturing sector, certainly it is equally true in the extractive and service sectors. Therefore, we have tabled an amendment which inserts after "manufacturing", in the heading the words "extraction or service". If this amendment is accepted consequent amendments might have to be made. In Committee the previous Under-Secretary indicated an interest in this matter, and he was certainly sympathetic. However, there have been no amendments from the Government.
In proposing the amendment I draw the attention of the Secretary of State to the definition of "industry" in the Welsh Development Agency (No. 2) Bill,
industry' includes any description of commercial activity, and any section of an industry and 'industrial' has a corresponding meaning".
If that is the meaning and spirit of the WDA and the SDA, and the NEB is their counterpart in England, there should be a broader definition of its rôle. It should certainly extend to some parts of the extractive and service sectors.

Mr. Crawford: I agree with what my hon. Friend the Member for Caernarvon (Mr. Wigley) has said. He intended this to be a probing amendment. To a certain


extent we have the same problems in Scotland as our friends have in Wales. I draw the Minister's attention to tourism and the services in connection with financial centres.
In Scotland we rely to a certain extent upon tourism for our economy and we have, as the Minister will know, a large financial centre. On a per capita basis we do more dealings in financial affairs than even the City of London. Therefore, on behalf of the people of Scotland and the Scottish National Party, I should like to hear the Minister's comments on the amendment.

Mr. Kaufman: The hon. Member for Caernarvon (Mr. Wigley) has acknowledged that this is a symbolic amendment because, if it were accepted without subsequent amendments to the clause, it would have the effect of making the heading inaccurate. That being so, he will not be surprised to hear that we cannot accept it. However, I understand that he and his hon. Friend the Member for

Perth and East Perthshire (Mr. Crawford) —if I may so call him—have intervened because they want to know the Government's attitude to this matter.

What I have to say is in a sense consequential on what I said to my hon. Friends regarding their amendment about co-operatives. It is important in considering how we proceed with this legislation, when enacted, that we should not diffuse too far its objectives as laid down in—

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Motion made, and Question put,
That the Motion relating to the European Parliament (Membership) may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Walter Harrison.]

The House divided: Ayes 220, Noes 17.

Division No. 256.]
AYES
[10.0 p.m.


Allaun, Frank
Dalyell, Tarn
Hayman, Mrs Helene


Archer, Peter
Davidson, Arthur
Heffer, Eric S.


Armstrong, Ernest
Davies, Bryan (Enfield N)
Hooley, Frank


Ashton, Joe
Davies, Denzil (Llanelli)
Howell, Denis (B'ham, Sm H)


Atkins, Ronald (Preston N)
Davis, Clinton (Hackney C)
Hoyle, Doug (Nelson)


Atkinson, Norman
Deakins, Eric
Huckfield, Les


Bagler, Gordon A. 7.
Dean, Joseph (Leeds W)
Hughes, Mark (Durham)


Barnett, Guy (Greenwich)
de Freitas, Rt Hon Sir Geoffrey
Hughes, Robert (Aberdeen N)


Barnett, Rt Hon Joel (Heywood)
Dempsey, James
Hughes, Roy (Newport)


Bates, Alt
Doig, Peter
Hunter, Adam


Bean, R. E.
Dormand, J. D.
Irvine, Rt Hon Sir A. (Edge Hill)


Bennett, Andrew (Stockport N)
Duffy, A. E. P.
Irving, Rt Hon S. (Dart(ord)


Bishop, E. S.
Dunn, James A.
Jackson, Miss Margaret (Lincoln)


Blenkinsop, Arthur
Dunnett, Jack
Jay, Rt Hon Douglas


Boardman, H.
Dunwoody, Mrs Gwyneth
Jenkins, Rt Hon Roy (Stechford)


Booth, Albert
Edelman, Maurice
John, Brynmor


Boothroyd, Miss Betty
Edge, Geoff
Jones, Alec (Rhondda)


Bottomley, Rt Hon Arthur
Ellis, John (Brigg &amp; Scun)
Jones, Barry (East Flint)


Boyden, James (Bish Auck)
Ellis, Tom (Wrexham)
Jones, Dan (Burnley)


Bray, Dr Jeremy
English, Michael
Kaufman, Gerald


Brown, Hugh D. (Provan)
Evans, loan (Aberdare)
Kerr, Russell


Brown, Robert C. (Newcastle W)
Evans, John (Newton)
Kilroy-Silk, Robert


Buchan, Norman
Ewing, Harry (Stirling)
Kinnock, Neil


Buchanan, Richard
Fernyhough, Rt Hon E.
Lambie, David


Callaghan, Rt Hon J. (Cardiff SE)
Fitch, Alan (Wigan)
Lamborn, Harry


Callaghan, Jim (Middleton &amp; P)
Flannery, Martin
Lamond, James


Campbell, Ian
Fletcher, Ted (Darlington)
Leadbitter, Ted


Canavan, Dennis
Fowler, Gerald (The Wrekin)
Lee, John


Carmichael, Neil
Fraser, John (Lambeth, N'w'd)
Lewis, Ron (Carlisle)


Carter-Jones, Lewis
Garrett, John (Norwich S)
Lipton, Marcus


Clemitson, Ivor
Garrett, W. E. (Wallsend)
Litterick, Tom


Cocks, Michael (Bristol S)
George, Bruce
Lomas, Kenneth


Cohen, Stanley
Gilbert, Dr John
Loyden, Eddie


Conlan, Bernard
Golding, John
Lyon, Alexander (York)


Cook, Robin F. (Edin C)
Gourlay, Harry
Lyons, Edward (Bradford W)


Corbett, Robin
Graham, Ted
McCartney, Hugh


Cox, Thomas (Tooting)
Grant, George (Morpeth)
McElhone, Frank


Craigen, J. M. (Maryhill)
Grant, John (Islington C)
MacFarquhar, Roderick


Crawshaw, Richard
Hamilton, W. W. (Central Fife)
McGuire, Michael (Ince)


Cronin, John
Hardy, Peter
Mackenzie, Gregor


Crosland, Rt Hon Anthony
Harper, Joseph
McMillan, Tom (Glasgow C)


Cryer, Bob
Harrison, Walter (Wakefield)
Madden, Max


Cunningham, G. (Islington S)
Hart, Rt Hon Judith
Mallalieu, J. P. W.


Cunningham, Dr J. (Whiteh)
Hatton, Frank
Marks, Kenneth




Marquand, David
Richardson, Miss Jo
Thomas, Jeffrey (Abertillery)


Marshall, Dr Edmund (Goole)
Roberts, Albert (Normanton)
Thomas, Ron (Bristol NW)


Marshall, Jim (Leicester S)
Roberts, Gwilym (Cannock)
Thorne, Stan (Preston South)


Mason, Rt Hon Roy
Roderick, Caerwyn
Tinn, James


Maynard, Miss Joan
Rodgers, George (Chorley)
Tomlinson, John


Mellish, Rt Hon Robert
Rodgers, William (Stockton)
Torney, Tom


Mikardo, Ian
Rooker, J. W.
Urwin, T. W.


Millan, Bruce
Ross, Rt Hon W. (KllmarnocK)
Varley, Rt Hon Eric Q.


Miller, Dr M. S. (E Kilbride)
Rowlands, Ted
Wainwright, Edwin (Dearne V)


Mitchell, R. C. (Soton, Itchen)
Ryman, John
Walker, Harold (Doncaster)


Molloy, William
Sandelson, Neville
Ward, Michael


Morris, Alfred (Wythenshawe)
Sedgemore, Brian
Watkinson, John


Morris, Charles R. (Openshaw)
Selby, Harry
Weitzman, David


Mulley, Rt Hon Frederick
Shaw, Arnold (llford South)
White, Frank R. (Bury)


Murray, Rt Hon Ronald King
Sheldon, Robert (Ashton-u-Lyne)
Whitlock, William


Newens, Stanley
Short, Mrs Renée (Wolv NE)
Williams, Alan (Swansea W)


Noble, Mike
Silkin, Rt Hon John (Deptford)
Williams, Alan Lee (Hornch'ch)


Oakes, Gordon
Silkin, Rt Hon S. C. (Dulwich)
Williams, Rt Hon Shirley (Hertford]


Ogden, Eric
Sillars, James
Williams, W. T. (Warrington)


O'Malley, Rt Hon Brian
Silverman, Julius
Wilson, Alexander (Hamilton)


Orme, Rt Hon Stanley
Skinner, Dennis
Wilson, William (Coventry SE)


Ovenden, John
Small, William
Wise, Mrs Audrey


Owen, Dr David
Smith, John (N Lanarkshire)
Woodall, Alec


Palmer, Arthur
Spearing, Nigel
Woof, Robert


Park, George
Spriggs, Leslie
Wrigglesworth, Ian


Parker, John
Stallard, A. W.
Young, David (Bolton E)


Pavitt, Laurie
Stoddart, David



Phipps, Dr Colin
Stott, Roger
TELLERS FOR THE AYE


Prescott, John
Strang, Gavin
Mr. James Hamilton and


Price, C. (Lewisham W)
Strauss, Rt Hon G. R.
Mr. Donald Coleman


Price, William (Rugby)
Taylor, Mrs Ann (Bolton W)





NOES


Brotherton, Michael
Kilfedder, James
Wainwright, Richard (Colne V)


Farr, John
Meyer, Sir Anthony
Wigley, Dafydd


Freud, Clement
Pardoe, John
Winterton, Nicholas


Grimond, Rt Hon J.
Penhaligon, David



Hooson, Emlyn
Ross, Stephen (Isle of Wight)
TELLERS FOR THE NOES


Howells, Geraint (Cardigan)
Steel, David (Roxburgh)
Mr. Cyril Smith and


Johnston, Russell (Inverness)
Thorpe, Rt Hon Jeremy (N Devon)
Mr. A.J Beith

Question accordingly agreed to.

INDUSTRY BILL

Question again proposed, That the amendment be made.

Mr. Kaufman: As I was saying when I was so unnecessarily interrupted, it is necessary, if we are to get the full effect of this Act, that we do not diffuse the aims as laid down in the Bill. We are particularly concerned in it with manufacturing industry, which lies at the heart of our economic progress as a nation, and we made that clear in the White Paper when we explained that the powers under discussion might be used when there was loss to unacceptable foreign control of any key sector of manufacturing industry.
The hon. Member for Caernarvon drew attention to the statements made in Standing Committee by the then Under-Secretary. We have considered the matter in the light of what my hon. Friend said but we have decided, on balance, that it is unnecessary to extend the powers in the way that the hon. Member would like—even though his amendment would not achieve what he would like—partly because we are most concerned about manufacturing industry and partly because there exist for many sectors of non-manufacturing industry other powers to achieve our objectives, such as legislation to control insurance companies or civil aviation.
I therefore hope that the hon. Member will withdraw his amendment, especially since to make it would do very little good.

Mr. Wigley: I shall be withdrawing the amendment for the same reason that I did not put it forward in the detailed manner that would be necessary to make coherent sense of it, and that is that the Welsh Development Agency (No. 2) Bill is passing through the House, The powers in Clause 2 are built into that Bill to a large extent, and those powers would be applicable to commercial activities in Wales, which includes extractive and service activities.
Notwithstanding that, the Welsh Development Agency will have the powers to do anything in Wales and any other part of the United Kingdom calculated

to secure its functions. Therefore, if there are things in Wales which are to be controlled from England, even though they are in the service sector, the Welsh Development Agency will be able to make attempts to take over if that is deemed to be in the public interest.
We therefore feel that we have the necessary powers in the Welsh Development Agency Bill and we sympathise with those people in the regions of England who do not have such powers but would obviously like them. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Kaufman: I beg to move Amendment No. 43, in page 7, line 6, at end insert 'or relevant bodies corporate'.

Mr. Deputy Speaker: With it we may also take Government amendments Nos. 44 and 45.
We may take Amendment No. 165, in line 18, leave out 'not resident in' and insert:
'assuming control, whether or not they are resident in the countries of'.
We may also take Amendment No. 46, in page 7, line 19, at end insert:
'and, where one or more of the persons carrying on the undertaking is a body corporate, also includes the happening of any such event as is specified in subsection (3) below:
relevant body corporate" means—

(a) a body corporate (whether or not incorporated under the law of the United Kingdom or of a part of the United Kingdom) carrying on as the whole or the major part of its business the whole or part of an important manufacturing undertaking, or
(b) a body corporate incorporated under the law of the United Kingdom or a part of the United Kingdom which is the holding company (as defined by section 154 of the Companies Act 1948 or section 148 of the Companies Act (Northern Ireland) 1960) of a group of companies carrying on as the whole or the major part of their business the whole or part of an important manufacturing undertaking.
(3) The events mentioned in subsection (2) above are all events whereby—

(a) a person not resident in the United Kingdom becomes entitled to exercise or control the exercise of the first, second or third qualifying percentage of votes; or
(b) a person resident in the United Kingdom and entitled to exercise or control the exercise of the first, second or third qualifying percentage of votes ceases to be resident in the United Kingdom; or


(c) control of the exercise of the first, second or third qualifying percentage of votes passes from a person not resident in the United Kingdom to another person not so resident.
(4) For the purposes of this Act—

(a) the first qualifying percentage of votes is thirty per cent.;
(b) the second qualifying percentage of votes is forty per cent.; and
(c) the third qualifying percentage of votes is fifty per cent.,
of the votes that may be cast at any general meeting of a relevant body corporate.
(5) In determining whether there has been a change of control, one or more persons acting together in concert may be treated as a single person.'.
With this goes Amendment (a) to Amendment No. 46, leave out subsections (3) and (4) and insert:
'(3) An event mentioned in subsection (2) above occurs whenever an interest in shares comprised in relevant share capital of a relevant body corporate to an extent which carries an entitlement to cast or to control the casting of thirty per cent. or more of the votes that may be cast at any general meeting of the body corporate—

(a) is acquired by any person not resident in the United Kingdom, or
(b) passes from a person not resident in the United Kingdom to another person not so resident,
and occurs also whenever—
(c) a person resident in the United Kingdom who is entitled to such an interest ceases to be so resident'.
We may also take Amendment No. 168, in page 7, line 19, at end insert:
'or the relocation of a person or persons in control from within the United Kingdom to outside the United Kingdom'.

Mr. Kaufman: I thank the hon. Member for Caernarvon (Mr. Wigley) for the sympathy he expressed for the English regions. We in the North-West have for some time consistently suffered a higher level of unemployment than has existed in Wales and therefore we are grateful for his sympathy.
These amendments have been tabled in part in order to give effect to assurances given in Committee. We gave an assurance to the hon. Member for Surrey, North-West (Mr. Grylls) which he was kind enough to call a "semi beau geste". We gave an assurance to the hon Member for Caernarvon which I am glad on this occasion to be able to fulfil, and we gave a further assurance to the hon. Member for Surrey, North-West.
10.15 p.m.
The amendments are in part designed to give effect to the assurance given in Committee and are in part designed to deal with the technical points of difficulty which arise from the fact that what we wish to preserve under national control are businesses, which are referred to in the Bill as "undertakings". But where-ever possible it is most convenient to protect the control of the business by preserving national control over the company which runs the business. The drafting of the Bill to cover both the undertaking and the body corporate which carries it on is somewhat complex. I hope that the House will be assisted and will bear with me while I attempt to explain our purpose.
I should first like to deal with the promises which the Government made in Committee to clarify certain points. First, it was pointed out that the definition of an important manufacturing undertaking in Clause 9(2) might cover an undertaking which had only some slight or marginal involvement in manufacturing. To meet that point we propose, in line 9 of page 7, to insert the words "wholly or mainly" to make it clear that we wish to have the power to make a prohibition or vesting order only in respect of an undertaking at least mainly engaged in manufacturing.
The second amendment, which results from an assurance given in Committee, is contained in Clause 9(3)(b) and is slightly more complicated. In Committee the hon. Member for Caernarvon put down an amendment dealing with the circumstances where the same person—natural or corporate—remained in control of a company but moved from the United Kingdom to become a resident abroad. Since the Bill as drafted referred to "a change of control" this was not covered since the control had not changed—only the place from which it was exercised. That loophole is now closed by subsection (3)(b).
The third assurance that we seek to honour is that we would define what is meant by "control". Here, in principle, our aim was simple, although in practice some further difficulties presented themselves. We see advantage, both to the companies concerned and to the Government, in there being certainty as to the position of control in any company. For


that reason we believe that a numerical definition of control, reflecting the principles of the take-over code, is to be preferred to looser and more pragmatic definitions. We therefore thought that the powers could be usable when control over 30 per cent. of the shares is involved. The 30 per cent. figure is one accepted as conferring control in many situations: it is used in Clause 8(1)(a) as the percentage that is held to give the NEB a controlling interest in a company; it is the percentage which, under the city code on takeovers and mergers, requires a bid to be made for all other equity shares. I hope therefore that the 30 per cent. figure will be seen as fair and sensible.
But it has proved necessary to go beyond this. The disadvantage of defining "control" in numerical terms is that there are times when someone controls the numerical percentage but does not in practice control the company. For example, ownership of 30 per cent. of a company's shares does not give control in practice when the remaining 70 per cent. are all in the hands of another person. Because of this, the Government accept that there may be times when a foreigner acquires 30 per cent. in such a way that the "control" he thereby acquires is purely formal. In these circumstances the change of "control" would not be such as to satisfy the conditions set out in Clause 10(1)(b), and no order could be made.
But under Clause 10(8)(b), three months after the Secretary of State learnt of this change of "control", his powers would have lapsed, had control been defined as 30 per cent. only After that period, the foreign owner of the 30 per cent. might have bought the remaining 70 per cent. of the shares, without any possibility of his being restrained under this Bill.
To guard against this we propose in subsection (4) that there should be three levels of qualifying percentages-30 per cent., 40 per cent. and 50 per cent. A non-United Kingdom resident who was about to acquire or had acquired 30 per cent. of the shares of a vital British firrn could seek the Government's approval and would then be free to proceed. He could then buy further shares, if he so wished, but the Government would be able to take action if he were about to acquire, or had acquired, shares which

would bring his holding to 40 per cent. or to 50 per cent.
These provisions are designed to give scope and freedom to the overseas purchaser, while retaining an element of control necessary if a numerical definition is not a result in a loophole in the powers. I regret that they are somewhat more complex than might be desirable, but I hope I have explained why that is so.
Lastly, I turn to technical amendments which we wish to make to deal with the United Kingdom business that is carried on not by one company but by a group of companies. As the Bill was drafted, the powers related to the company carrying on the undertaking, and this would not have permitted the Government to deal with a case where an important manufacturing undertaking was carried on by a group of companies, and no single company could be dealt with because no single company could be said to carry on the undertaking on its own.
We therefore wish to introduce the concept of "a relevant body corporate" to Clause 10 (1) (a), and to define this in Clause 10 (2) to cover United Kingdom holding companies whose subsidiaries carry on an important manufacturing undertaking, as well as companies which together or separately carry on such a business.
We recognise that the power to vest the shares of a company, and still more those of a holding company, should be exercised only if the important manufacturing undertaking accounts for a major part—that is, more than half—of the activities of the company or group. This is achieved by the phrase
carrying on as the whole or the major part of its business the whole or part of an important manufacturing undertaking".
There is thus no question of the shares of the ultimate holding company being vested simply because it controls, as a small part of its business, an important manufacturing undertaking. We shall, of course, always be able to vest the assets of that undertaking itself.
The amendments that we propose are technical and sometimes complex, but they are designed with the overall purpose of enabling the Government to take action as effectively as possible in respect


of key United Kingdom manufacturing businesses. If accepted, they will ensure that the powers are confined more directly to such businesses and to the companies or groups of companies in which they account for more than half of their commercial and industrial activities.

Mr. Grylls: The Minister was kind enough to say that I had said in Standing Committee that his assurances to move amendments at the Report stage were a "semi-beau geste". To be fair to the Government, they have come forward quite well with a number of the things for which we asked. Above all, we were concerned that Clause 9 should be clarified. I think the Minister will agree that these matters were rather vaguely worded. The amendments are an improvement, therefore we welcome them —particularly the changes proposed in the definition of "control".
What worried us was that there was no definition of control, so I think that what is now proposed is right. Having suggested in Committee that 30 per cent. would be a reasonable amount as the Minister said himself, in line with the City take-over code, I would not object to that at all. I think it is helpful and useful. We have put forward in Amendment (a) to Amendment No. 46 a simplification of Amendment No. 46, which I think anyone would accept is a highly complex amendment. We had asked for a clarification of the definition of "control". I accept that the Minister has tried to bring forward a clarification, and many right hon. and hon. Members, on reading Amendment No. 46, would say that it is a good attempt, but I am not sure that it has not fogged the issue a little more.
We were concerned about the qualifying percentages and why it was necessary to have the three-tier system. It seemed to us that there was a simpler way of doing it, such as in Amendment (a), simply by taking 30 per cent. and leaving it at that. However, in the light of what the Minister said, it is possible that someone could come in and have, as it were, a second bite at the cherry after the moment had passed. If that happened and it were a case of 15 per cent. on top of the 30 per cent. the Secretary of State then could do little about it.
It would be wrong to look that gift horse in the mouth. Generally, it is an improvement. So Amendment (a) was a probing amendment. I do not think that we have any great objection, and we understand the explanation which the hon. Gentleman gave.
Amendment No. 44 is very important. In Committee, quite a lot was made of the point that, for example, there could be a Hong Kong company with most of its manufacturing in Hong Kong but with a small unit in Britain. I felt sure that the Secretary of State did not mean that kind of situation to come within the ambit of the clause. I think that the insertion of the words "wholly and mainly" in line 9 will improve that.
The addition at the beginning part of Amendment No. 46 again is an improvement. For that reason, we have no objection to it. What worried us and what worries me still, even with the definition of "control" being restricted to 30 per cent. and over, is the possible combined effect of these clauses on joint ventures in this country. I am sure that the Secretary of State, with his recent experience, will know that in North Sea oil there are many joint ventures whereby foreign technology is shared with our own firms and British firms are involved in North Sea oil technology. If joint ventures of this kind are to prosper, it is important that we do not frighten them off. The 30 per cent. will help. It may be that from now on foreign ventures will be less than 30 per cent. so that these clauses will not be triggered off. But there is still a danger.
In applying this part of the legislation in the future, I hope that the Government will think about the effect on overseas associates. With the present economic situation which everyone is so worried about, it is important that we have responsible foreign investment in this country which will bring us technology and jobs. It is important that there is transferability of this investment and that foreign companies do not feel locked in or that, if they wish to make a transfer of their shares, they will be snapped up by the Government.
Although we accept these amendments as an improvement, the fact remains that the way that the Secretary of State and his successors use these clauses will be


more important than the actual drafting of the clauses. It is vitally important, as the Chancellor of Exchequer said a few months ago, to use the recycled Arab oil petrodollars and to ensure that this money comes here. If we are to get it, we must not frighten them off.
I ask the Minister to clarify one further matter. In Committee, in the course of our Seventeenth Sitting, the former Under-Secretary put to us what we thought was an ominous suggestion. He said:
The Government have been approached by management and unions outside the manufacturing sector requesting that the scope of these clauses be extended to other sectors of industry not in manufacturing".—[Official Report, Standing Committee E, 22nd April 1975, c. 950.]
I hope that the Government have abandoned that one. If that is part of the shuffling round of chairs in the recent Government reshuffle, we welcome it. But I hope that the Minister can confirm that that suggestion made by the former Under-Secretary has been abandoned. To be fair to the hon. Gentleman, he did not say that it was Government policy. He said merely that the Government were considering it.
I hope that the Minister will give an assurance—because it is important, if we have accepted amendments—that it should apply only to manufacturing industry or undertakings wholly and entirely in manufacturing industry and that they are not thinking of extending it outside. I hope that we can have that assurance tonight.
I hope that we can end in a friendly way and that peace can reign between us. I hope that the Minister will tell us that that has been dropped, in which case we shall not vote against his amendment.

10.30 p.m.

Mr. Wigley: I welcome the move made by the Government which makes Amendment No. 168 unnecessary because its provisions are contained in the complicated amendment tabled by the Government, which we welcome.
I should like to ask one or two questions which arise from Amendment No. 165. We have suggested that change of control is pertinent to the public interest, whether or not that change of control involves moving control from within the United Kingdom to outside. The

Minister will have noticed from reading the report of the Committe that we went into this matter in fair detail. There may be changes in control that could be against the public interest. If control is put into the wrong hands of residents of the United Kingdom that could be as much against the public interest as if it were put into the wrong hands of people outside the United Kingdom.
Linked with that—and this was discussed in Committee—is the situation of companies within the EEC. A certain amount of doubt was expressed in Committee about the future before the referendum. We now know that our future is with our colleagues in the EEC. The question arises whether we are building in legislation that discriminates against other countries of the EEC acquiring control and whether that is contrary to the requirements of the Treaty of Rome that there should be freedom of movement of capital and that companies in other countries within the EEC should have the same freedom as companies within the United Kingdom.
It is for that reason that we put forward Amendment No. 165. This would permit an intervention in the change of control just within the United Kingdom so that there would be no degree of discrimination against companies from within the EEC. The same rules would apply to them as would apply to companies within the United Kingdom, but it would be necessary to adopt Amendment No. 165 to avoid cutting across the provisions of the Treaty of Rome. This is a probing amendment and I ask the Minister to reply to these points.

Mr. Kaufman: The hon. Member for Surrey, North-West (Mr. Grylls) was kind enough to say that peace can reign among us if I give him further assurances. I accept what he said in the spirit in which he said it, but may I say, in the friendliest possible way, that peace will reign between his Front Bench and mine and between us if he does not seek to drive some kind of wedge between my right hon. Friend, myself and the Ministers in the Department. We are carrying out the policies of the Department and the fact that Ministers have changed does not mean that those policies do not continue and that we do not keep to the assurances that we gave in Committee on this and


other matters. I should be grateful if that could be borne in mind when dealing with further amendments.
The hon. Member for Caernarvon (Mr. Wigley) was good enough to accept the amendment we put forward following the assurances we gave him in Committee. However, he asked about the EEC. He gave us as one of the reasons for parity what one might call a kind of reverse punishment. He was speaking to Amendment No. 165. My right hon. Friend the then Secretary of State discussed this point at some length in Committee at a highly factual level in slightly fevered circumstances.
Our legal advice is that the acquisition of property of one member State by a national of another does not fall within the freedom of establishment when the acquisition is being attempted from outside the member State in which the property is situated. This was a matter which particularly concerned my hon. Friends, among others.
It would, therefore, be no infringement of the right of freedom of establishment for a prohibition or vesting order to be made to prevent or frustrate a bid for a United Kingdom company made by a company registered in another member State—that is, a takeover bid from abroad —but it would infringe our Community obligations if we prevented a United Kingdom subsidiary of a company registered in and controlled by residents of a member State from acquiring a British concern through these powers which could not by their nature be used to prevent acquisition of a British company which was not foreign-controlled.
If, therefore, an EEC company organised a bid for a key British manufacturing undertaking through a United Kingdom subsidiary, Clauses 9 to 13 could not be applied to prevent or frustrate the acquisition without the United Kingdom breaching its obligations. It would not be in breach of our EEC obligations to prevent the acquisition of key British manufacturing enterprises by companies which are themselves controlled by non-EEC residents provided that the prohibition applied equally, no matter whether the acquiring company was a United Kingdom company or a company of any other EEC member State.
The explanation for this is that such action would not discriminate between British and other EEC companies but would rather be an action applying to companies in all EEC member States which were controlled by non-EEC residents. Thus, it would not be possible for a bid by a non-EEC acquirer to evade our legislation by being routed through a non-EEC subsidiary even if that non-EEC subsidiary were an established company.
I have gone into a little detail on this, but if it would suit the hon. Gentleman I will write to him in further detail so that he shall be enlightened. If he does not object, I will perhaps arrange for that information to be printed in the Official Report—if that is allowed—so that other hon. Members may be able to see the advice that I am able to pass on to the hon. Gentleman.
In view of what I have said I do not know whether the hon. Gentleman will be anxious for me to respond to his amendment. If he wishes it, I shall have to tell him in a little detail that we do not find it acceptable.

Amendment agreed to.

Amendments made: No. 44, in page 7, line 9, after 'undertaking', insert 'wholly or mainly'.
No. 45, in line 15, leave out
'or any body corporate which carries on such an undertaking'.
No. 46, in line 19, at end insert
'and, where one or more of the persons carrying on the undertaking is a body corporate, also includes the happening of any such event as is specified in subsection (3) below:
relevant body corporate" means—

(a) a body corporate (whether or not incorporated under the law of the United Kingdom or of a part of the United Kingdom) carrying on as the whole or the major part of its business the whole or part of an important manufacturing undertaking, or
(b) a body corporate incorporated under the law of the United Kingdom or a part of the United Kingdom which is the holding company (as defined by section 154 of the Companies Act 1948 or section 148 of the Companies Act (Northern Ireland) 1960) of a group of companies carrying on as the whole or the major part of their business the whole or part of an important manufacturing undertaking.


(3) The events mentioned in subsection (2) above are all events whereby—

(a) a person not resident in the United Kingdom becomes entitled to exercise or control the exercise of the first, second or third qualifying percentage of votes; or
(b) a person resident in the United Kingdom and entitled to exercise or control the exercise of the first, second or third qualifying percentage of votes ceases to be resident in the United Kingdom; or
(c) control of the exercise of the first, second or third qualifying percentage of votes passes from a person not resident in the United Kingdom to another person not so resident.
(4) For the purposes of this Act—

(a) the first qualifying percentage of votes is thirty per cent.;
(b) the second qualifying percentage of votes is forty per cent.; and
(c) the third qualifying percentage of votes is fifty per cent.,
of the votes that may be cast at any general meeting of a relevant body corporate.

(5) In determining whether there has been a change of control, one or more persons acting together in concert may be treated as a single person.'.—[Mr. Kaufman.]

Clause 10

POWER TO MAKE ORDERS

Mr. Kaufman: I beg to move Amendment No. 47, in page 7, line 23, leave out
'any body corporate which carries on such an undertaking'
and insert:
'a relevant body corporate'.

Mr. Deputy Speaker (Mr. Oscar Murton): With this we are taking Government Amendments Nos. 48 to 51.

Mr. Kaufman: Perhaps I might go through the amendments briefly. Amendment No. 47 makes it possible for a prohibition order to be made not only in relation to a body corporate which carries on an important manufacturing undertaking but also in relation to a holding company of a group of companies which carry on such an undertaking and also in relation to the individual companies of such a group if that is necessary, for example, because the holding company is a foreign company.
Amendment No. 48 will make it necessary for the Government when making a prohibition order to satisfy the undertaking which is threatened with a change of control. Previously the Govern-

ment could simply have prohibited a change of control of a company without telling it which undertaking the Government wished to retain from unacceptable foreign ownership. The amendment will give greater certainty to the companies affected and give statutory effect to the procedure which the Government wish to adopt.
Amendments 49 and 51 relate to discussion in Committee, when the question whether the powers to make a vesting order should be confined to the shares involved in the change of control was debated. The Government then made it clear that the power could not be confined to this, since that would make it impossible to act when ownership of all the company's shares was the only means of saving the company, but an undertaking was given to consider the matter further.
We now propose that unless the national interest requires otherwise the vesting order will vest only those shares involved in the change of control. This will enable the Government to vest all the shares where necessary, but normally only the more restricted vesting will occur.
Amendment No. 50 is a small amendment, designed to avoid a technical breach of the Companies Act 1948. Section 1 of that Act provides that a company should have a minimum number of members of seven or, if it is a private company, of two. The vesting of all the shares in a company in the Secretary of State or the National Enterprise Board, as was possible under the clause, would conflict with this, and to avoid any such conflict we wish to make it clear that the vesting order may vest shares in nominees for the Secretary of State or the Board, as well as in the Secretaary of State and the Board. It is a small point, designed to deal with a technical difficulty, and I hope that it will occasion no disagreement.

Mr. Grylls: The Under-Secretary, probably by mistake did not reply to a question I put to him earlier about the comment made by his predecessor. Perhaps he could take the opportunity of replying to it later.
We agree with Amendments Nos. 47 to 51, which are put before us in answer to questions asked in Committee. I take it that Amendment No. 48 is an attempt to


tighten up the Bill. In layman's nontechnical terms, the Bill as originally drafted meant that nobody from, say, Iran could take over any British company. Obviously, that is not the Government's intention. Their intention is that nobody from Iran, for example, shall take over a certain British company if they do not think that that is suitable. That is fair enough. The amendment clarifies the situation.
But perhaps the insertion of the words "relating to that undertaking" after "things" would further clarify it. If the Minister felt that that would be helpful, perhaps an amendment could be moved in another place.
We are pleased about Amendment No. 51, because we said in Committee that we did not want any Government to use the powers to take over whole groups of companies just because one part was threatened by an overseas takeover bid. Under the amendment, only that part of a group or company threatened with a takeover shall be taken into public control. That is an improvement.
Is there anything in the measure or the vesting order to prevent the Secretary of State disposing of capital assets vested in him or his nominees by virtue of such an order? It is important that the Government should be able to get rid of things. A rather mysterious Amendment No. 52 caught my eye on the Notice Paper on Friday. It seemed to fly out of the window over the weekend. I do not know what has happened to it. It has apparently disappeared.
10.45 p.m.
I hope that the Minister will consider this matter, even if he is not moving the amendment concerned—which apparently he is not, because it is not on the Notice Paper for today, although it was on the Notice Paper on Friday. It is the amendment that never was—or was but never is. Perhaps the Minister will clarify this matter.
If the Minister is now satisfied, as a result of legal advice over the weekend, that there are clauses in the Bill which already cover this point and that the Secretary of State is able to dispose of shares he has taken for this particular purpose, it is not necessary to have the Amendment No. 52 which was on the Notice Paper.
It is important that this point should be answered. I think that the Minister would want to satisfy the House about the matter, because the amendment appeared on the Notice Paper.
Therefore, with that query and hopefully with an answer on the comment made by the former Under-Secretary in Committee, I think that we could probably make progress quite quickly.

Mr. Kaufman: The suggested additional amendment which the hon. Gentleman has put forward is one that we shall look at. If the clarification that he suggests would be improved by the addition of those or other words, we shall seek to do so. I give no commitment on the matter, but obviously we shall look at it with care.
As regards Amendment No. 52, we thought about the matter but we decided that it was not a necessary amendment. It was, in a sense, a declaratory amendment, but, on reflection, it appeared to us that it declared too much. To that extent, we decided not to proceed with it.
As regards the question that the hon. Gentleman put to me earlier—I apologise to him for not having dealt with it, purely through omission—my hon. Friend the former Under-Secretary talked in Committee of representations that had been made, and he said that the matter would be looked a t. He gave no commitment. Indeed, the somewhat rueful reception given by the hon. Member for Caernarvon (Mr. Wigley) to my response to his defective amendment will show that we decided not to proceed down that road.

Mr. Grylls: I am grateful to the Minister for that explanation. Therefore, we can take it now as absolutely cast-iron that these clauses will not apply to non-manufacturing industry. I take it that that is a very fair assurance from the Government.
The Minister did not satisfy me that he was absolutely clear about Amendment No. 52. May I assume that he has removed that amendment from the Notice Paper, and therefore not moved it, because he is satisfied that the Secretary of State can dispose of capital or assets vested in him or his nominees by virtue of such an order? If the Minister can answer "Yes". I shall be satisfied. If he can answer with a categorical


"Yes" to the question of non-manufacturing industry also, I think that we are set for a very auspicious evening.

Mr. Wigley: On that very point, there is an amendment later on the Notice Paper, No. 166, which raises that question. The proposal was to add an additional clause to facilitate the transfer to some third party which was not in the public sector. I take it that the assurance given to the Opposition Front Bench on this point would also cover Amendment No. 166, which would therefore be unnecessary in this context.
There was a lot of debate in Committee on this matter. The interpretation at that stage was that this point was not covered, but presumably it is now covered by the amendments and the interpretations that have subsequently come forward, and therefore the later amendment is unnecessary.

Mr. Kaufman: I think that we had better leave consideration of that matter until we come to it. If by any chance we do not debate it, I shall take some opportunity of clarifying our attitude to it.
In answer to the hon. Member for Surrey, North-West (Mr. Giylls), I say that we are satisfied that the Bill as it now stands will conform to what he requests. We would not have been satisfied with the amendment. The amendment is declaratory and we think that if it had

'(3A) Where 30 per cent. or more of the share capital of the body corporate vests in the Secretary of State or the Board by virtue of a vesting order, the Secretary of State or, as the case may be, the Board shall serve on the holders of the share capital that does not so vest, within 28 days of the making of the order, a notice informing them of the making of the order and of the right of each of them to require the Secretary of State or the Board to acquire the share capital held by him.


(3B) The recipient of a notice under subsection (3A) above may, within three months of the date of the notice, serve on the Secretary of State or, as the case may be, the Board, a counter-notice requiring him or them to acquire the share capital held by the recipient in the body corporate.


(3C) A vesting order shall have effect, from the date of a counter-notice, as if the share capital specified in the notice had been specified in the vesting order.


(3D) Subsections (3A) to (3C) above shall have the same effect in relation to share capital vesting in nominees for the Secretary of State or the Board as in relation to share capital vesting as mentioned in those subsections'.

Mr. Deputy Speaker (Mr. Oscar Murton): With this it will be convenient to take the following:
Amendment (a), in line 3, after 'on', insert 'each of'.
Amendment (b), in line 3, after 'of', insert 'any part of'.
Amendment (c), in line 4, after 'informing', insert 'each of'.

remained on the Order Paper it would have declared too much. That being so, we think it better that it should not be adopted.

Amendment agreed to.

Amendments made: No. 48, in page 7, line 28, at end insert 'specify the undertaking and'.

No. 49, in page 8, line 4, leave out from beginning to 'or' in line 6 and insert:
'(i) share capital and loan capital to which this subsection applies,'.
No. 50, in page 8, line 8, at end add:
'or in nominees for the Board or himself'
No. 51, in page 8, line 8, at end add:
'(2A) The share capital and loan capital to which subsection (2) above applies are—

(a) in any case where the Secretary of State considers that the interests mentioned in subsection (2)(c) above cannot, or cannot appropriately be protected unless all the share capital of the relevant body corporate vests by virtue of the order, the share capital of that body corporate,
(b) in any other case, the share capital which appears to the Secretary of State to be involved in the change of control,
together with so much (if any) of the loan capital of the relevant body corporate as may be specified in the order.'.—[Mr. Kaufman.]

The Secretary of State for Industry (Mr. Eric Varley): I beg to move Amendment No. 53, in page 8, line 13, at end insert:

Amendment (d), in line 6, after 'or' insert ', as the case may be,'.

Amendment (e), in line 6, after second 'the', insert
'whole of that person's such holding of'.

Amendment (f), in line 6, leave out 'held by him'.

Mr. Varley: I am very pleased that I have been able to have a go before the


guillotine falls at 11 o'clock. I was set to go on what I thought was an important amendment in the first stage of our proceedings. I am glad that I have not missed my chance although this is a relatively insignificant amendment when we consider what has taken place so far. Perhaps my view is not shared by the hon. Member for Surrey, North-West (Mr. Grylls).
We have proposed in Amendments Nos. 49 and 51 that unless the national interest requires otherwise, a vesting order will vest only those shares involved in the change of control. This will enable the Government to vest all the shares where this is necessary but it will mean that otherwise, and normally, only the more restricted vesting will occur.
We have also given thought to the position of the other shareholders, and this is dealt with in Amendment No. 53. We recognise that some shareholders might feel that they did not wish to hold shares in a company which had fallen under the control of the Government or the NEB, and that, if many felt like that, it might be difficult for shareholders to sell their shares.
To deal with this, we have tabled an amendment in subsections (3B) to (3D) that will require the Secretary of State or the board, or its nominees, to make an offer to remaining shareholders if more than 30 per cent. of the share capital is vested under a vesting order. This offer will cover all outstanding shares. The remaining shareholders will then have three months to choose whether they wish to retain their shares, sell them on the market or have them vested.
This gives the shareholders a free and fair choice and ensures that their interests are safeguarded. There is an obvious anology with the requirement in the City Code under which a bidder who acquires 30 per cent. of the shares in a company is required to make a bid for the remaining shares on the same terms.

Mr. Deputy Speaker: Before I put the Question, perhaps the right hon. Member for Henley (Mr. Heseltine) will inform the Chair whether it is desired to divide on any of the sub-amendments to Amendment No. 53?

Mr. Heseltine: We should like to divide on Amendment (a) to Amendment No. 53.

Mr. Deputy Speaker: Then in that case the hon. Member for Surrey, North-West (Mr. Grylls) should move Amendment (a).

Mr. Michael Grylls: I beg to move, as an amendment to the proposed amendment (a), in line 3, after 'on' insert 'each of'.

Mr. Deputy Speaker: The Question is—

Mr. Grylls: May 1, on a point of order, Mr. Deputy Speaker, seek your assistance in this moment of confusion, which I am sure is my fault. Do you want me to move each sub-amendment individually in regard to sub-amendment (a) to (f), or should I move only the first amendment, amendment (a)?

Mr. Deputy Speaker: I doubt whether there would be time for that. I suggest that it would be convenient to deal with amendment (a).

Mr. Grylls: I have already sought to move it.

Mr. Deputy Speaker: Perhaps I could give the hon. Gentleman a little more guidance. He must sit down before 11 o'clock.

Mr. Grylls: Thank you very much for your guidance, Mr. Deputy Speaker.
I should inform the Secretary of State for Industry that we regard Amendment No. 53 as important. It is important that the remaining shareholders in a company vested in the Government should have the opportunity to pass on their shares to the Government. The Secretary of State may have done something important in taking this step—namely, he will have had an effect on industry and on the investing public. He will have satisfied the public that he means to use the clause fairly sensibly. I welcome that attitude. Our amendments (a) to (f) are tabled for clarification. The provision will make the situation cast-iron and crystal-clear. It may not be possible to work through this case tonight because of the guillotine, but I hope the Secretary of State will look at the matter in the same spirit as that in which he moved Amendment No. 53. If he thinks


it is useful and wishes to make his purpose crystal-clear, he may consider moving these amendments in another place. I therefore ask my hon. Friends to support Amendment (a).

Question put, That the amendment to the proposed amendment be made:—

The House divied: Ayes 209, Noes 222.

Division No. 257.]
AYES
[11.0 p.m.


Aitken, Jonathan
Hawkins, Paul
Percival, Ian


Alison, Michael
Hayhoe, Barney
Pink, R. Bonner


Atkins, Rt Hon H. (Spelthorne)
Henderson, Douglas
Powell, Rt Hon J. Enoch


Awdry, Daniel
Heseltine, Michael
Prior, Rt Hon James


Bain, Mrs Margaret
Hicks, Robert
Pym, Rt Hon Francis


Baker, Kenneth
Holland, Philip
Rathbone, Tim


Banks, Robert
Hooson, Emlyn
Rawlinson, Rt Hon Sir Peter


Beith, A. J.
Hordern, Peter
Rees, Peter (Dover &amp; Deal)


Bennett, Dr Reginald (Fareham)
Howell, David (Guildford)
Reid, George


Benyon, W.
Howell, Ralph (North Norfolk)
Renton, Rt Hon Sir D. (Hunts)


Berry, Hon Anthony
Howells, Geraint (Cardigan)
Renton, Tim (Mid-Sussex)


Biffen, John
Hutchison, Michael Clark
Ridley, Hon Nicholas


Boscawen, Hon Robert
Irvine, Bryant Godman (Rye)
Ridsdale, Julian


Bottomley, Peter
James, David
Rifkind, Malcolm


Bowden, A. (Brighton, Kemptown)
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Roberts, Michael (Cardiff NW)


Boyson, Dr Rhodes (Brent)
Jesse!, Toby
Roberts, Wyn (Conway)


Braine, Sir Bernard
Johnston, Russell (Inverness)
Ross, Stephen (Isle of Wight)


Brotherton, Michael
Jopling, Michael
Ross, William (Londonderry)


Brown, Sir Edward (Bath)
Kershaw, Anthony
Rossi, Hugh (Hornsey)


Bryan, Sir Paul
Kilfedder, James
Rost, Peter (SE Derbyshire)


Buchanan-Smith, Alick
King, Evelyn (South Dorset)
Sainsbury, Tim


Buck, Antony
King, Tom (Bridgwater)
Scott, Nicholas


Budgen, Nick
Kirk, Peter
Shaw, Giles (Pudsey)


Bulmer, Esmond
Kitson, Sir Timothy
Shelton, William (Streatham)


Butler, Adam (Bosworth)
Knight, Mrs Jill
Shepherd, Colin


Carlisle, Mark
Knox, David
Shersby, Michael


Chalker, Mrs Lynda
Lamont, Norman
Sims, Roger


Churchill, W. S.
Lane, David
Sinclair, Sir George


Clarke, Kenneth (Rushcliffe)
Latham, Michael (Melton)
Skeet, T. H. H.


Clegg, Walter
Lawson, Nigel
Smith, Cyril (Rochdale)


Cockcroft, John
Lester, Jim (Beeston)
Smith, Dudley (Warwick)


Cooke, Robert (Bristol W)
Luce, Richard
Speed, Keith


Cope, John
MacCormick, Iain
Spence, John


Crawford, Douglas
McCrindle, Robert
Spicer, Michael (S Worcester)


Crouch, David
McCusker, H.
Sproat, Iain


Crowder, F. P.
Macfarlane, Neil
Stainton, Keith


Davies, Rt Hon J. (Knutsford)
MacGregor, John
Stanbrook, Ivor


Dean, Paul (N Somerset)
McNair-Wilson, P. (New Forest)
Stanley, John


Dodsworth, Geoffrey
Madel, David
Steel, David (Roxburgh)


Douglas-Hamilton, Lord James
Marshall, Michael (Arundel)
Steen, Anthony (Wavortree)


Drayson, Burnaby
Marten, Neil
Stewart, Donald (Western Isles)


Durant, Tony
Mates, Michael
Stewart, Ian (Hltchin)


Dykes, Hugh
Mather, Carol
Stradling Thomas, J.


Edwards, Nicholas (Pembroke)
Mawby, Ray
Taylor, Teddy (Cathcart)


Elliott, Sir William
Maxwell-Hyslop, Robin
Tebbit, Norman


Fairbairn, Nicholas
Mayhew, Patrick
Temple-Morris, Peter


Fairgrieve, Russell
Meyer, Sir Anthony
Thatcher, Rt Hon Margaret


Farr, John
Miller, Hal (Bromsgrove)
Thomas, Rt Hon P. (Hendon S)


Finsberg, Geoffrey
Mills, Peter
Thompson, George


Fisher, Sir Nigel
Miscampbell, Norman
Thorpe, Rt Hon Jeremy (N Devon)


Fletcher, Alex (Edinburgh N)
Mitchell, David (Basingstoke)
Trotter, Neville


Fletcher-Cooke, Charles
Moate, Roger
Tugendhat, Christopher


Fowler, Norman (Sutton C'f'd)
Molyneaux, James
van Straubenzee, W. R.


Fox, Marcus
Monro, Hector
Vaughan, Dr Gerard


Fraser, Rt Hon H. (Stafford &amp; St)
Montgomery, Fergus
Viggers, Peter


Freud, Clement
Moore, John (Croydon C)
Wainwright, Richard (Come V)


Gilmour, Sir John (East Fife)
Morris, Michael (Northampton S)
Wakeham, John


Goodhart, Philip
Morrison, Charles (Devizes)
Walker, Rt Hon P. (Worcester)


Gower, Sir Raymond (Barry)
Morrison, Hon Peter (Chester)
Watt, Hamish


Gray, Hamish
Mudd, David
Weatherill, Bernard


Grimond, Rt Hon J.
Neave, Airey
Welsh, Andrew


Grist, Ian
Nelson, Anthony
Whitelaw, Rt Hon William


Grylls, Michael
Neubert, Michael
Wigley, Dafydd


Hall, Sir John
Newton, Tony
Wilson, Gordon (Dundee E)


Hall-Davis, A. G. F.
Normanton, Tom
Winterton, Nicholas


Hamilton, Michael (Salisbury)
Nott, John
Young, Sir G. (Ealing, Acton)


Hampson, Dr Keith
Page, Rt Hon R. Graham (Crosby)
Younger, Hon George


Hannam, John
Pardoe, John



Harvie Anderson, Rt Hon Miss
Parkinson, Cecil
TELLERS FOR THE AYES:


Hastings, Stephen
Pattie, Geoffrey
Mr. Spencer Le Marchant and


Havers, Sir Michael
Penhaligon, David
Mr. Fred Silvester.




NOES


Allaun, Frank
Ashton, Joe
Bagier, Gordon A. T.


Archer, Peter
Atkins, Ronald (Preston N)
Barnett, Guy (Greenwich)


Armstrong, Ernest
Atkinson, Norman
Barnett, Rt Hon Joel (Heywood)




Bates, Alf
Grant, John (Islington C)
Ovenden, John


Bean, R. E.
Hamilton, James (Bothwell)
Owen, Dr David


Bennett, Andrew (Stockport N)
Hardy, Peter
Palmer, Arthur


Bishop, E. S.
Harrison, Walter (Wakefield)
Park, George


Blenkinsop, Arthur
Hart, Rt Hon Judith
Parker, John


Boardman, H.
Hatton, Frank
Pavitt, Laurie


Booth, Albert
Hayman, Mrs Helene
Phipps, Dr Colin


Boothroyd, Miss Betty
Heffer, Eric S.
Prescott, John


Bottomley, Rt Hon Arthur
Hooley, Frank
Price, C. (Lewisham W)


Boyden, James (Bish Auck)
Howell, Denis (B'ham, Sm H)
Price, William (Rugby)


Bray, Dr Jeremy
Hoyle, Doug (Nelson)
Richardson, Miss Jo


Brown, Hugh D. (Provan)
Huckfield, Les
Roberts, Albert (Normanton)


Brown, Robert C. (Newcastle W)
Hughes, Mark (Durham)
Roberts, Gwilym (Cannock)


Buchan, Norman
Hughes, Robert (Aberdeen N)
Roderick, Caerwyn


Buchanan, Richard
Hughes, Roy (Newport)
Rodgers, George (Chorley)


Callaghan, Rt Hon J. (Cardiff SE)
Hunter, Adam
Rodgers, William (Stockton)


Callaghan, Jim (Middleton &amp; P)
Irvine, Rt Hon Sir A. (Edge Hill)
Rooker, J. W.


Campbell, Ian
Irving, Rt Hon S. (Dartford)
Ross, Rt Hon W. (Kilmarnock)


Canavan, Dennis
Jackson, Miss Margaret (Lincoln)
Rowlands, Ted


Carmichael, Neil
Jay, Rt Hon Douglas
Ryman, John


Carter-Jones, Lewis
Jenkins, Rt Hon Roy (Stechford)
Sandelson, Neville


Clemitson, Ivor
John, Brynmor
Sedgemore, Brian


Cocks, Michael (Bristol S)
Jones, Alec (Rhondda)
Selby, Harry


Cohen, Stanley
Jones, Barry (East Flint)
Shaw, Arnold (Ilford South)


Coleman, Donald
Jones, Dan (Burnley)
Sheldon, Robert (Ashton-u-Lyne)


Conlan, Bernard
Kaufman, Gerald
Short, Mrs Renée (Wolv NE)


Cook, Robin F. (Edin C)
Kerr, Russell
Silkin, Rt Hon John (Deptford)


Corbett, Robin
Kilroy-Silk, Robert
Silkin, Rt Hon S. C. (Dulwich)


Cox, Thomas (Tooting)
Kinnock, Neil
Sillars, James


Craigen, J. M. (Maryhill)
Lambie, David
Silverman, Julius


Crawshaw, Richard
Lamborn, Harry
Skinner, Dennis


Cronin, John
Lamond, James
Small, William


Crosland, Rt Hon Anthony
Leadbitter, Ted
Smith, John (N Lanarkshire)


Cryer, Bob
Lee, John
Spearing, Nigel


Cunningham, G. (Islington S)
Lewis, Ron (Carlisle)
Spriggs, Leslie


Cunningham, Dr J. (Whiten)
Lipton, Marcus
Stallard, A. W.


Dalyell, Tarn
Litterick, Tom
Stoddart, David


Davidson, Arthur
Lomas, Kenneth
Stott, Roger


Davies, Bryan (Enfield N)
Loyden, Eddie
Strang, Gavin


Davies, Denzil (Llanelli)
Lyon, Alexander (York)
Strauss, Rt Hon G. R.


Davis, Clinton (Hackney C)
Lyons, Edward (Bradford W)
Taylor, Mrs Ann (Bolton W)


Deakins, Eric
McCartney, Hugh
Thomas, Jeffrey (Abertillery)


Dean, Joseph (Leeds W)
McElhone, Frank
Thomas, Mike (Newcastle E)


de Freitas, Rt Hon Sir Geoffrey
MacFarquhar, Roderick
Thomas, Ron (Bristol NW)


Dempsey, James
McGuire, Michael (Ince)
Thorne, Stan (Preston South)


Doig, Peter
Mackenzie, Gregor
Tinn, James


Dormand, J. D.
McMillan, Tom (Glasgow C)
Tomlinson, John


Duffy, A. E. P.
McNamara, Kevin
Torney, Tom


Dunn, James A.
Madden, Max
Urwin, T. W.


Dunnett, Jack
Mallalieu, J. P. W.
Varley, Rt Hon Eric G.


Dunwoody, Mrs Gwyneth
Marks, Kenneth
Wainwright, Edwin (Dearne V)


Edelman, Maurice
Marquand, David
Walker, Harold (Doncaster)


Edge, Geoff
Marshall, Dr Edmund (Goole)
Ward, Michael


Ellis. Tom (Wrexham)
Marshall, Jim (Leicester S)
Watkinson, John


English, Michael
Mason, Rt Hon Roy
Weitzman, David


Evans, Ioan (Aberdare)
Maynard, Miss Joan
White, Frank R. (Bury)


Evans, John (Newton)
Mellish, Rt Hon Robert
Whitlock, William


Ewing, Harry (Stirling)
Mikardo, Ian
Williams, Alan (Swansea W)


Fernyhough, Rt Hon E.
Millan, Bruce
Williams, Alan Lee (Hornch'ch)


Fitch, Alan (Wigan)
Miller, Dr M. S. (E Kilbride)
Williams, Rt Hon Shirley (Hertford)


Flannery, Martin
Mitchell, R. C. (Soton, Itchen)
Williams, W. T. (Warrington)


Fletcher, Ted (Darlington)
Molloy, William
Wilson, Alexander (Hamilton)


Foot, Rt Hon Michael
Morris, Alfred (Wythenshawe)
Wilson, William (Coventry SE)


Fowler, Gerald (The Wrekin)
Morris, Charles R. (Openshaw)
Wise, Mrs Audrey


Fraser, John (Lambeth, N'w'd)
Mulley, Rt Hon Frederick
Woodall, Alec


Garrett, John (Norwich S)
Murray, Rt Hon Ronald King
Woof, Robert


Garrett, W. E. (Wallsend)
Newens, Stanley
Wrigglesworth, Ian


George, Bruce
Noble, Mike
Young, David (Bolton E)


Gilbert, Dr John
Oakes, Gordon



Golding, John
Ogden, Eric
TELLERS FOR THE NOES:


Gourlay, Harry
O'Malley, Rt Hon Brian
Mr. Joseph Harper and


Graham, Ted
Orme, Rt Hon Stanley
Mr. John Ellis.


Grant, George (Morpeth)

Question accordingly negatived.

It being after Eleven o'clock, Mr. Speaker proceeded, pursuant to Standing Order No. 43 (Business Committee) and the Orders [12th May and this day] to put forthwith the Question already proposed from the Chair.

Amendment proposed, No. 53, in page 8, line 13, at end insert:
'(3A) Where 30 per cent or more of the share capital of the body corporate vests in the Secretary of State or the Board by virtue of a vesting order, the Secretary of State or, as the case may be, the Board shall serve on the holders of the share capital that does not so vest, within 28 days of the making of the order, a notice informing them of the making of the


order and of the right of each of them to require the Secretary of State or the Board to acquire the share capital held by him.
(3B) The recipient of a notice under subsection (3A) above may, within three months of the date of the notice, serve on the Secretary of State or, as the case may be, the Board, a counter-notice requiring him or them to acquire the share capital held by the recipient in the body corporate.
(3C) A vesting order shall have effect, from the date of a counter-notice, as if the share

capital specified in the notice had been specified in the vesting order.

(3D) Subsections (3A) to (3C) above shall have the same effect in relation to share capital vesting in nominees for the Secretary of State or the Board as in relation to share capital vesting as mentioned in those subsections'.— [Mr. Varley.]

Question put, That the amendment be made:—

The House divided: Ayes 222, Noes 13.

Division No. 258.]
AYES
[11.12 p.m.


Allaun, Frank
Fletcher, Ted (Darlington)
Mason, Rt Hon Roy


Archer, Peter
Foot, Rt Hon Michael
Maynard, Miss Joan


Armstrong, Ernest
Fowler, Gerald (The Wrekin)
Mellish, Rt Hon Robert


Ashton, Joe
Fraser, John (Lambeth, N'w'd)
Mikardo, Ian


Atkins, Ronald (Preston N)
Garrett, John (Norwich S)
Millan, Bruce


Atkinson, Norman
Garrett, W. E. (Wallsend)
Miller, Dr M. S. (E Kilbride)


Bagler, Gordon A. T.
George, Bruce
Mitchell, R. C. (Soton, Itchen)


Bain, Mrs Margaret
Gilbert, Dr John
Molloy, William


Barnett, Guy (Greenwich)
Golding, John
Morris, Alfred (Wythenshawe)


Bates, All
Gourlay, Harry
Morris, Charles R. (Openshaw)


Bean, R. E.
Graham, Ted
Mulley, Rt Hon Frederick


Bennett, Andrew (Stockport N)
Grant, George (Morpeth)
Murray, Rt Hon Ronald King


Bishop, E, S.
Grant, John (Islington C)
Newens, Stanley


Blenklnsop, Arthur
Hamilton, James (Bothwell)
Noble, Mike


Booth, Albert
Hardy, Peter
Oakes, Gordon


Boothroyd, Miss Betty
Harrison, Walter (Wakefield)
Ogden, Eric


Bottomley, Rt Hon Arthur
Hart, Rt Hon Judith
O'Malley, Rt Hon Brian


Boyden, James (Bish Auck)
Hatton, Frank
Orme, Rt Hon Stanley


Bray, Dr Jeremy
Hayman, Mrs Helene
Ovenden, John


Brown, Hugh D. (Provan)
Heffer, Eric S.
Owen, Dr David


Brown, Robert C. (Newcastle W)
Henderson, Douglas
Palmer, Arthur


Buchan, Norman
Hooley, Frank
Park, George


Callaghan, Rt Hon J. (Cardiff SE)
Howell, Denis (B'ham, Sm H)
Parker, John


Callaghan, Jim (Middleton &amp; P)
Hoyle, Doug (Nelson)
Pavitt, Laurie


Campbell, Ian
Huckfield, Les
Phipps, Dr Colin


Canavan, Dennis
Hughes, Mark (Durham)
Prescott, John


Carmichael, Neil
Hughes, Robert (Aberdeen N)
Price, C. (Lewisham W)


Carter-Jones, Lewis
Hughes, Roy (Newport)
Price, William (Rugby)


Clemitson, Ivor
Hunter, Adam
Reid, George


Cocks, Michael (Bristol S)
Hutchison, Michael Clark
Richardson, Miss Jo


Cohen, Stanley
Irvine, Rt Hon Sir A. (Edge Hill)
Roberts, Albert (Normanton)


Coleman, Donald
Irving, Rt Hon S. (Dartford)
Roberts, Gwilym (Cannock)


Conlan, Bernard
Jackson, Miss Margaret (Lincoln)
Roderick, Caerwyn


Cook, Robin F. (Edin C)
Jay, Rt Hon Douglas
Rodgers, George (Chorley)


Corbett, Robin
Jenkins, Rt Hon Roy (Stechford)
Rodgers, William (Stockton)


Cox, Thomas (Tooting)
John, Brynmor
Rooker, J. W.


Craigen, J. M. (Maryhill)
Jones, Alec (Rhondda)
Ross, Rt Hon W. (Kilmarnock)


Crawford, Douglas
Jones, Barry (East Flint)
Rowlands, Ted


Crawshaw, Richard
Jones, Dan (Burnley)
Ryman, John


Crosland, Rt Hon Anthony
Kaufman, Gerald
Sandelson, Neville


Cryer, Bob
Kerr, Russell
Sedgemore, Brian


Cunningham, G. (Islington S)
Kilroy-Silk, Robert
Selby, Harry


Cunningham, Dr J. (Whiteh)
Kinnock, Neil
Shaw, Arnold (Ilford South)


Dalyell, Tam
Lambie, David
Sheldon, Robert (Ashton-u-Lyne)


Davidson, Arthur
Lamborn, Harry
Silkin, Rt Hon John (Deptford)


Davies, Bryan (Enfield N)
Lamond, James
Silkin, Rt Hon S. C. (Dulwich)


Davies, Denzil (Llanelli)
Leadbitter, Ted
Sillars, James


Davis, Clinton (Hackney C)
Lewis, Ron (Carlisle)
Silverman, Julius


Deakins, Eric
Lipton, Marcus
Skinner, Dennis


Dean, Joseph (Leeds w)
Litterick, Tom
Smith, John (N Lanarkshire)


de Freitas, Rt Hon Sir Geoffrey
Lomas, Kenneth
Spearing, Nigel


Dempsey, James
Loyden, Eddie
Spriggs, Leslie


Dormand, J. D.
Lyon, Alexander (York)
Stallard, A. W.


Duffy, A. E. P.
Lyons, Edward (Bradford W)
Stewart, Donald (Western Isles)


Dunn, James A.
McCartney, Hugh
Stoddart, David


Dunnett, Jack
MacCormick, lain
Stott, Roger


Dunwoody, Mrs Gwyneth
McElhone, Frank
Strang, Gavin


Edelman, Maurice
MacFarquhar, Roderick
Strauss, Rt Hon G. R.


Edge, Geoff
McGuire, Michael (Ince)
Taylor, Mrs Ann (Bolton W)


Ellis, Tom (Wrexham)
Mackenzie, Gregor
Thomas, Mike (Newcastle E)


English, Michael
McMillan, Tom (Glasgow C)
Thomas, Ron (Bristol NW)


Evans, loan (Aberdare)
McNamara, Kevin
Thompson, George


Evans, John (Newton)
Madden, Max
Thome, Stan (Preston South)


Ewing, Harry (Stirling)
Marks, Kenneth
Tinn, James


Fernyhough, Rt Hon E.
Marquand, David
Tomlinson, John


Fitch, Alan (Wigan)
Marshall, Dr Edmund (Goole)
Torney, Tom


Flannery, Martin
Marshall, Jim (Leicester S)
Urwin, T. W.




Varley, Rt Hon Eric G.
Williams, Alan (Swansea W)
Woodall, Alec


Wainwright, Edwin (Dearne V)
Williams, Alan Lee (Hornch'ch)
Woof, Robert


Ward, Michael
Williams, Rt Hon Shirley (Hertford)
Wrigglesworth, Ian


Watkinson, John
Williams, W. T. (Warrington)
Young, David (Bolton E)


Watt, Hamish
Wilson, Alexander (Hamilton)



Weitzman, David
Wilson, Gordon (Dundee E)
TELLERS FOR THE AYES


Welsh, Andrew
Wilson, William (Coventry SE)
Mr. John Ellis and


White, Frank R. (Bury)
Wise, Mrs Audrey
Mr. Joseph Harper


Whitlock, William






NOES


Beith, A. J.
Kilfedder, James
Winterton, Nicholas


Freud, Clement
Pardoe, John



Grimond, Rt Hon J.
Penhaligon, David
TELLERS FOR THE NOES


Hooson, Emlyn
Ross, Stephen (Isle of Wight)
Mr. Cyril Smith and


Howells, Geraint (Cardigan)
Thorpe, Rt Hon Jeremy (N Devon)
Mr. David Steel.


Johnston, Russell (Inverness)
Wainwright, Richard (Colne V)

Question accordingly agreed to.

MR. SPEAKER then proceeded to put the Questions necessary for the disposal of the Business to be concluded at Eleven o'clock.

Mr. Speaker: To save time I propose to put the Question on blocks of amendments. I shall single out any amendments on which any hon. Member wishes to have a Division.

Mr. Cyril Smith: On a point of order, Mr. Speaker, I request a Division on each amendment.

Mr. Speaker: This is a situation in which we must try to govern ourselves with good temper and common sense. I have about 20 amendments to put. I am willing to allow Divisions on certain of them, if that is wished. I am not prepared to allow Divisions on all 20 amendments.

Mr. Emlyn Hooson: Further to that point of order. Is not a precise precedent for this provided by the Industrial Relations Bill which came to this House three years ago, when there was a vote on every amendment?

Mr. Dennis Skinner: I think you will recall, Mr. Speaker, that in 1971 there was a precedent which was to some extent similar to the situation which has developed today. Following the announcement of the clear intention of the Liberals to call Divisions on every amendment, I would point out that Mr. Speaker has it in his power under Standing Order 36 to rule on unnecessarily claimed Divisions, to take appropriate action and to call votes in the Chamber.

Mr. Speaker: I am always grateful to the hon. Member for Bolsover (Mr.

Skinner) when he recalls my powers, which I shall use as appropriate.
Seriously—I was not referring to the points of order which have been raised—the House surely wants to get on to the debate on what is a serious matter. There may come a time when the Chair must consider the question of a Closure on that matter. The more time we spend on this, the sooner the Closure may be given. That, of course, is not a threat. That is an observation thrown out.

Mr. Cyril Smith: Mr. Cyril Smith rose—

Mr. Speaker: We shall take Amendments Nos. 54 and 55 together.

Mr. Cyril Smith: On a point of order, Mr. Speaker. I request that Divisions take place on the following amendments: Nos. 55, 57, 58, 72, 74 and 75—a total of six out of the 20.

Mr. Speaker: I think that we might begin and see how we get on. That is my hope.

Clause 11

CONTENTS OF VESTING ORDERS

Amendment made: No. 54, in page 9, line 12, leave out 'specified in' and insert 'which will vest by virtue of'.—[Mr. Varley.]

Amendment proposed, No. 55, in page 9, line 21, leave out from beginning to 'to' in line 29, and insert:

'(a) any capital or assets which will vest by virtue of the order; and
(b) any assets—

(i) of a body corporate whose capital will so vest, or
(ii) of any subsidiary of such a body corporate;


and may in particular, but without prejudice to the generality of this subsection, prohibit or set aside the transfer of any such capital or assets or any right in respect of such capital or assets.

(3) A vesting order setting aside a transfer of capital or assets such as are mentioned in subsection (2)(a) above shall entitle the Secretary of State or the Board to recover the capital or assets transferred.

(3A) A vesting order setting aside a transfer of assets such as are mentioned in subsection

(2)(b) above shall entitle the body corporate or subsidiary to recover the assets transferred.

(3B) Any vesting order setting aside a transfer shall give the person entitled to recover the capital or assets a right, if he fails to recover them,'.—[Mr. Varley.]

Question put, That the amendment be made:—

The House divided: Ayes 222, Noes 15.

Division No. 259]
AYES
[11.25 p.m.


Allaun, Frank
Flannery, Martin
Maynard, Miss Joan


Archer, Peter
Fletcher, Ted (Darlington)
Mellish, Rt Hon Robert


Armstrong, Ernest
Foot, Rt Hon Michael
Mikardo, Ian


Ashton, Joe
Fowler, Gerald (The Wrekin)
Millan, Bruce


Atkins, Ronald (Preston N)
Fraser, John (Lambeth, N'w'd)
Miller, Dr M. S. (E Kilbride)


Atkinson, Norman
Garrett, John (Norwich S)
Mitchell, R. C. (Soton, Itchen)


Bagier, Gordon A. T.
Garrett, W. E. (Wallsend)
Molloy, William


Bain, Mrs Margaret
George, Bruce
Morris, Alfred (Wythenshawe)


Barnett, Guy (Greenwich)
Gilbert, Dr John
Morris, Charles R. (Openshaw)


Barnett, Rt Hon Joel (Heywood)
Golding, John
Mulley, Rt Hon Frederick


Bates, Alf
Gourlay, Harry
Murray, Rt Hon Ronald King


Bean, R. E.
Graham, Ted
Newens, Stanley


Bennett, Andrew (Stockport N)
Grant, George (Morpeth)
Noble, Mike


Bishop, E. S.
Grant, John (Islington C)
Oakes, Gordon


Blenkinsop, Arthur
Hamilton, James (Bothwell)
O'Malley, Rt Hon Brian


Booth, Albert
Hardy, Peter
Orme, Rt Hon Stanley


Boothroyd, Miss Betty
Harper, Joseph
Ovenden, John


Bottomley, Rt Hon Arthur
Harrison, Walter (Wakefield)
Owen, Dr David


Boyden, James (Bish Auck)
Hart, Rt Hon Judith
Palmer, Arthur


Bray, Dr Jeremy
Hatton, Frank
Park, George


Brown, Hugh D. (Provan)
Hayman, Mrs Helene
Parker, John


Brown, Robert C. (Newcastle W)
Heffer, Eric S.
Pavitt, Laurie


Buchan, Norman
Henderson, Douglas
Phipps, Dr Colin


Callaghan, Rt Hon J. (Cardiff SE)
Hooley, Frank
Prescott, John


Callaghan Jim (Middleton &amp; P)
Howell, Denis (B'ham, Sm H)
Price, C. (Lewisham W)


Campbell, Ian
Hoyle, Doug (Nelson)
Price, William (Rugby)


Canavan, Dennis
Huckfield, Les
Reid, George


Carmichael, Neil
Hughes, Mark (Durham)
Richardson, Miss Jo


Carter-Jones, Lewis
Hughes, Robert (Aberdeen N)
Roberts, Albert (Normanton)


Clemitson, Ivor
Hughes, Roy (Newport)
Roberts, Gwllym (Cannock)


Cocks, Michael (Bristol S)
Hunter, Adam
Roderick, Caerwyn


Cohen, Stanley
Irvine, Rt Hon Sir A. (Edge Hill)
Rodgers, George (Chorley)


Coleman, Donald
Irving, Rt Hon S. (Dartford)
Rodgers, William (Stockton)


Conlan, Bernard
Jackson, Miss Margaret (Lincoln)
Rooker, J. W.


Cook, Robin F. (Edin C)
Jay, Rt Hon Douglas
Ross, Rt Hon W. (Kilmarnock)


Corbett, Robin
John, Brynmor
Rowlands, Ted


Cox, Thomas (Tooting)
Jones, Alec (Rhondda)
Ryman, John


Craigen, J. M. (Maryhlll)
Jones, Barry (East Flint)
Sandelson, Neville


Crawford, Douglas
Jones, Dan (Burnley)
Sedgemore, Brian


Crawshaw, Richard
Kaufman, Gerald
Selby, Harry


Crosland, Rt Hon Anthony
Kerr, Russell
Shaw, Arnold (llford South)


Cryer, Bob
Kilroy-Silk, Robert
Silkin, Rt Hon John (Deptford)


Cunningham, G. (Islington S)
Kinnock, Neil
Silkin, Rt Hon S. C. (Dulwich)


Cunningham, Dr J. (Whiteh)
Lambie, David
Sillars, James


Dalyell, Tarn
Lamborn, Harry
Silverman, Julius


Davidson, Arthur
Lamond, James
Skinner, Dennis


Davies, Bryan (Enfield N)
Leadbitter, Ted
Small, William


Davies, Denzil (Llanelli)
Lewis, Ron (Carlisle)
Smith, John (N Lanarkshire)


Davis, Clinton (Hackney C)
 Lipton, Marcus
Spearing, Nigel


Deakins, Eric
Litterick, Tom
Spriggs, Leslie


Dean, Joseph (Leeds W)
Lomas, Kenneth
Stallard, A. W.


de Freitas, Rt Hon Sir Geoffrey
Loyden, Eddie
Stewart, Donald (Western Isles)


Dempsey, James
Lyon, Alexander (York)
Stott, Roger


Doig, Peter
Lyons, Edward (Bradford W)
Strang, Gavin


Dormand, J. D.
McCartney, Hugh
Strauss, Rt Hon G. R.


Duffy, A. E. P.
MacCormick, lain
Taylor, Mrs Ann (Bolton W)


Dunn, James A.
McElhone, Frank
Thomas, Mike (Newcastle E)


Dunnett, Jack
MacFarquhar, Roderick
Thomas, Ron (Bristol NW)


Dunwoody, Mrs Gwyneth
McGuire, Michael (Ince)
Thompson, George


Edelman, Maurice
Mackenzie, Gregor
Thorne, Stan (Preston South)


Edge, Geoff
McMillan, Tom (Glasgow C)
Tinn, James


Ellis, Tom (Wrexham)
McNamara, Kevin
Tomlinson, John


English, Michael
Madden, Max
Torney, Tom


Evans, loan (Aberdare)
Marks, Kenneth
Urwin, T. W.


Evans, John (Newton)
Marquand, David
Varley, Rt Hon Eric G.


Ewing, Harry (Stirling)
Marshall, Dr Edmund (Goole)
Wainwright, Edwin (Dearne V)


Fernyhough, Rt Hon E.
Marshall, Jim (Leicester S)
Ward, Michael


Fitch, Alan (Wigan)
Mason, Rt Hon Roy
Watkinson, John




 Watt, Hamish
Williams, Rt Hon Shirley (Hertford)
Wool, Robert


Weitzman, David
Williams, W. T. (Warrington)
Wrigglesworth, Ian


Welsh, Andrew
Wilson, Alexander (Hamilton)
Young, David (Bolton E)


White, Frank R. (Bury)
Wilson, Gordon (Dundee E)



Whitlock, William
Wilson, William (Coventry SE)
TELLERS FOR THE AYES


Wigley, Dafydd
Wise, Mrs Audrey
Mr. John Ellis and


Williams, Alan (Swansea W)
Woodall, Alec
Mr. David Stoddart.


Williams, Alan Lee (Hornch'ch)






NOES


Brotherton, Michael
Lester, Jim (Beeston)
Wainwright, Richard (Colne V)


Freud, Clement
Pardoe, John
Winterton, Nicholas


Grimond, Rt Hon J.
Penhaligon, David



Hooson, Emlyn
Ross, Stephen (Isle of Wight)
TELLERS FOR THE NOES:


Howells, Geraint (Cardigan)
Steel, David (Roxburgh)
Mr. Cyril Smith and


Johnston, Russell (Inverness)
Thorpe, Rt Hon Jeremy (N Devon)
Mr. A. J. Beith.


Kilfedder, James

Question accordingly agreed to.

Amendment made: No. 56, in page 9, line 33, leave out 'notified' and insert 'given notice to'.—[Mr. Varley.]

Amendment proposed, No. 57, in page 9, line 34, at end insert
'and the Secretary of State shall publish a copy of any such notice in the London Gazette, the Edinburgh Gazette and the Belfast Gazette as soon as practicable after he has given it'.—[Mr. Varley.]

Mr. Speaker: I would point out that under the terms of Standing Order No. 36 Mr. Speaker may,
if in his opinion the division is unnecessarily claimed, take the vote of the House, or committee, by calling upon the Members who support, and who challenge his decision, successively to rise in their places; and he shall thereupon, as he thinks fit, either declare the determination of the House or committee, or name tellers for a division.
I hope we can get on.

Question put, That the amendment be made:—

The House proceeded to a Division, and Mr. SPEAKER stated that he thought the "Ayes" had it, and, on his decision being challenged, it appeared to him that the Division was unnecessarily claimed, and he accordingly called upon the Members who supported and who challenged his decision successively to rise in their, places; and he declared the "Ayes" had it, eight Members only who challenged his decision having stood up.

Amendment agreed to.

Amendment proposed, No. 58 in, page 9, line 35, leave out subsection (5).—(Mr. Varley.)

Question put, That the amendment be made:—

The House proceeded to a Division, and Mr. SPEAKER stated that he thought

the "Ayes" had it, and, on his decision being challenged, it appeared to him that the Division was unnecessarily claimed, and he accordingly called upon the Members who supported and who challenged his decision successively to rise in their places; and he declared the "Ayes" had it, 13 Members only who challenged his decision having stood up.

Amendment agreed to.

Amendments proposed: No. 59, in page 9, line 41, leave out subsection (6).

No. 60, in page 10, line 23, in clause 13, leave out 'the extinguishment or transfer of the rights' and insert 'any extinguishment or transfer of rights'.

No. 61, in page 10, line 33, in Clause 13, leave out paragraph (c).—[Mr. Kaufman.]

Mr. Cyril Smith: On a point of order, Mr. Speaker. If you are prepared to adopt this procedure we propose to challenge every amendment.

Mr. Jeremy Thorpe: Further to that point of order, Mr. Speaker. Could you assist the House by giving a little further elucidation of your most recent ruling? I understand that you are relying upon Standing Order No. 36, which provides that if in your opinion a Division is unnecessarily claimed, you may disallow it. Are we to take it, Sir, that that is a qualitative or a quantitative criterion? While accepting the ruling which you have just given, may I ask you whether it is not a fact that if your discretion in the future is merely to be determined by numbers, it would be a criterion which would spell the doom of every minority in the House, including the official Opposition.

Mr. Speaker: Of course the right hon. Gentleman is right. I would never dream of making my decision on those grounds. What I have to decide is whether a Division is purposeless, and if we are to continue with claims for a Division, whether we are wasting time. Where there is an important debate to follow—on which I am not allowed to express my personal views—I cannot understand the tactics.

11.45 p.m.

Mr. Hooson: Further to your ruling on that point of order, Mr. Speaker. If I heard you aright, you laid down as a test whether or not a Division was purposeless. With great respect, how can you judge, save on a quantitative basis? That is what you are purporting to do. With the greatest respect, it does not tie up with the answer you gave in response to the request of my right hon. Friend the Member for Devon, North (Mr. Thorpe), because the purposelessness of the vote as you defined it seems to be based on quantity and nothing else.

Mr. Speaker: One of the troubles of my position is that I am invested with great discretions, which I must administer as best I can, I think seldom to the satisfaction of everybody. This is a case in which I am exercising my discretion. I feel that we must get on.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): On a point of order. I should like to be in a very conciliatory mood. I understand the point of view of the Liberal Party. Individual Members have certain rights, and if they are in any way reduced I can understand their indignation. I understand that Liberal Members want to vote twice more, physically to show their point of view in the Division Lobbies. Speaking as Government Chief Whip, may I respectfully put to the Chair that it would save a great deal of ill-feeling if those two votes were allowed in the proper form, and then we could all end up on a happy note.

Mr. Speaker: I am delighted to have this interpretation of the Liberal position. May we now get on with Amendment No. 59?

Mr. Cyril Smith: On a point of order, Mr. Speaker. If it will help you in giving a ruling, I can confirm that if you were

able to accede to the Government Chief Whip's suggestion that would be acceptable to me and my colleagues.

Mr. Speaker: I am delighted to accept any accommodation of this sort.

Amendment made: No. 59, in page 9, line 41, leave out subsection (6).—[Mr. Kaufman.]

Clause 13

COMPENSATION ORDERS

Amendments made: No. 60, in page 10, line 23, leave out "the extinguishment or transfer of the rights" and insert:
any extinguishing or transfer of rights".

No. 61 in page 10, line 33 leave out paragraph (c).

No. 62, in page 10, line 36, leave out from "compensation" to end of line 39 and insert:
in respect of the relevant period".

No. 63, in page 10, line 41, leave out 'liabilities' and insert:
'rights, liabilities or incumbrances'.

No. 64, in page 10, line 43, at end insert:
'and in paragraph (d) above "the relevant period" means—

"(i) in relation to capital or assets, the period commencing with the date on which the capital or assets vest in the Board or the Secretary of State or their or his nominees and ending with the date of payment of compensation; and
(ii) in relation to rights, liabilities and incumbrances, the period commencing with the date on which they are extinguished and ending on the date of payment'—[Mr. Kaufman.]

Clause 14

FINANCIAL ASSISTANCE UNDER INDUSTRY ACT 1972 FOR BODIES CORPORATE WHICH MAKE PLANNING AGREEMENTS

Amendments made: No. 65, in page 11, line 17, leave out from beginning to second 'a' in line 18 and insert 'When'.

No. 66, in page 11, line 25, leave out from 'than' to 'and' in line 26 and insert:

'(i) the percentage which is the prescribed percentage at the date of the planning agreement, or
(ii) in the case of a project which was also identified in a previous planning agreement,


the percentage which was the prescribed percentage at the date of that agreement,'.

No. 67, in page 11, line 43, at end insert:
'(2A) When a body corporate makes a planning agreement, the Secretary of State shall lay a statement that the body corporate has made such an agreement before each House of Parliament'.

No. 68, in page 11, line 44, leave out subsection (3).—[Mr. Kaufman.]

Clause 16

INCREASE IN LIMIT ON CREDITS

Amendment proposed: No. 72, in page 13, line 13, leave out from 'installations)' to 'for' in line 15.—[Mr. Kaufman.]

Question put forthwith, That the amendment be made:—

The House divided: Ayes 199, Noes 14.

Division No. 260.]
AYES
[11.50 p.m.


Allaun, Frank
Fowler, Gerald (The Wrekin)
Molloy, William


Archer, Peter
Fraser, John (Lambeth, N'w'd)
Morris, Alfred (Wythenshawe)


Armstrong, Ernest
Garrett, John (Norwich S)
Morris, Charles R. (Openshaw)


Ashton, Joe
Garrett, W. E. (Wallsend)
Mulley, Rt Hon Frederick


Atkins, Ronald (Preston N)
George, Bruce
Murray, Rt Hon Ronald King


Bagier, Gordon A. T.
Gilbert, Dr John
Newens, Stanley


Barnett, Guy (Greenwich)
Golding, John
Noble, Mike


Barnett, Rt Hon Joel (Heywood)
Gourlay, Harry
O'Malley, Rt Hon Brian


Bates, Alf
Graham, Ted
Orme, Rt Hon Stanley


Bean, R. E.
Grant, George (Morpeth)
Ovenden, John


Bennett, Andrew (Stockport N)
Grant, John (Islington C)
Owen, Dr David


Bishop, E. S.
Hamilton, James (Bothwell)
Palmer, Arthur


Blenkinsop, Arthur
Hardy, Peter
Park, George


Booth, Albert
Harrison, Walter (Wakefield)
Parker, John


Boothroyd, Miss Betty
Hart, Rt Hon Judith
Phipps, Dr Colin


Bottomley, Rt Hon Arthur
Hatton, Frank
Prescott, John


Boyden, James (Bish Auck)
Hayman, Mrs Helene
Price, C. (Lewisham W)


Bray, Dr Jeremy
Hooley, Frank
Price, William (Rugby)


Brown, Hugh D. (Provan)
Howell, Denis (B'ham, Sm H)
Richardson, Miss Jo


Brown, Robert C. (Newcastle W)
Hoyle, Doug (Nelson)
Roberts, Albert (Normanton)


Buchan, Norman
Huckfield, Les
Roberts, Gwilym (Cannock)


Callaghan, Jim (Middleton &amp; P)
Hughes, Mark (Durham)
Rodgers, George (Chorley)


Campbell, Ian
Hughes, Robert (Aberdeen N)
Rodgers, William (Stockton)


Canavan, Dennis
Hughes, Roy (Newport)
Rooker, J. W.


Carmichael, Neil
Hunter, Adam
Ross, Rt Hon W. (Kilmarnock)


Carter-Jones, Lewis
Irvine, Rt Hon Sir A. (Edge Hill)
Rowlands, Ted


Clemitson, Ivor
Irving, Rt Hon S. (Dartford)
Ryman, John


Cocks, Michael (Bristol S)
Jackson, Miss Margaret (Lincoln)
Sandelson, Neville


Cohen, Stanley
John, Brynmor
Sedgemore, Brian


Coleman, Donald
Jones, Alec (Rhondda)
Selby, Harry


Conlan, Bernard
Jones, Barry (East Flint)
Shaw, Arnold (llford South)


Cook, Robin F. (Edin C)
Jones, Dan (Burnley)
Silkin, Rt Hon John (Deptford)


Corbett, Robin
Kaufman, Gerald
Silkin, Rt Hon S. C. (Dulwich)


Cox, Thomas (Tooting)
Kerr, Russell
Sillars, James


Craigen, J. M. (Maryhill)
Kilroy-Silk, Robert
Silverman, Julius


Crawshaw, Richard
Kinnock, Neil
Skinner, Dennis


Cryer, Bob
Lambie, David
Small, William


Cunningham, Dr J. (Whiteh)
Lamborn, Harry
Smith, John (N Lanarkshire)


Dalyell, Tam
Lamond, James
Spearing, Nigel


Davidson, Arthur
Leadbitter, Ted
Spriggs, Leslie


Davies, Bryan (Enfield N)
Lewis, Ron (Carlisle)
Stallard, A. W.


Davies, Denzil (Llanelli)
Lipton, Marcus
Stoddart, David


Davis, Clinton (Hackney C)
Litterick, Tom
Stott, Roger


Deakins, Eric
Lomas, Kenneth
Strang, Gavin


Dean, Joseph (Leeds W)
Loyden, Eddie
Strauss, Rt Hon G. R.


de Freitas, Rt Hon Sir Geoffrey
Lyons, Edward (Bradford W)
Taylor, Mrs Ann (Bolton W)


Dempsey, James
McCartney, Hugh
Thomas, Mike (Newcastle E)


Dormand, J. D.
MacCormick, lain
Thomas, Ron (Bristol NW)


Duffy, A. E. P.
McElhone, Frank
Thorne, Stan (Preston South)


Dunn, James A.
MacFarquhar, Roderick
Tinn, James


Dunnett, Jack
McGuire, Michael (Ince)
Tomlinson, John


Dunwoody, Mrs Gwyneth
Mackenzie, Gregor
Torney, Tom


Edelman, Maurice
McMillan, Tom (Glasgow C)
Urwin, T. W.


Edge, Geoff
McNamara, Kevin
Varley, Rt Hon Eric G.


Ellis John (Brigg &amp; Scun)
Madden, Max
Wainwright, Edwin (Dearne V)


Ellis, Tom (Wrexham)
Marks, Kenneth
Ward, Michael


English, Michael
Marquand, David
Watkinson, John


Evans, loan (Aberdare)
Marshall, Dr Edmund (Goole)
Weitzman, David


Evans, John (Newton)
Marshall, Jim (Leicester S)
White, Frank R. (Bury)


Ewing, Harry (Stirling)
Maynard, Miss Joan
Whitlock, William


Fernyhough, Rt Hon E
Mellish, Rt Hon Robert
Wigley, Dafydd


Fitch, Alan (Wigan)
Mikardo, Ian
Williams, Alan (Swansea W)


Flannery, Martin
Miller, Dr M. S. (E Kilbride)
Williams, Alan Lee (Hornch'ch)


Fletcher, Ted (Darlington)
Mitchell, R. C. (Soton, Itchen)
Williams, W. T. (Warrington)




Wilson, Alexander (Hamilton)
Wool, Robert
TELLERS FOR THE AYES:


Wilson, William (Coventry SE)
Wrigglesworth, Ian
Mr. Joseph Harper and


Wise, Mrs Audrey
Young, David (Bolton E)
Mr. Laurie Pavitt.


Woodall, Alec






NOES


Brotherton, Michael
Kilfedder, James
Wainwright, Richard (Colne V)


Freud, Clement
Pardoe, John
Winterton, Nicholas


Gower, Sir Raymond (Barry)
Ross, Stephen (Isle of Wight)



Hooson, Emlyn
Smith, Cyril (Rochdale)
TELLERS FOR THE NOES:


Howells, Geraint (Cardigan)
Steel, David (Roxburgh)
Mr. A. J. Beith and


Johnston, Russell (Inverness)
Thorpe, Rt Hon Jeremy (N Devon)
Mr. David Penhaligon.

Question accordingly agreed to.

Clause 17

RENEWAL OF GUARANTEES

Amendment made: No. 73, in page 13, line 17, at beginning insert:
'( ) In subsections (2) and (6) of that section, after the words "subsection (1)" there shall be inserted the words "or (7A)"'.—[Mr. Varley.]

Mr. Michael English: On a point of order, Mr. Speaker. The Liberal Party is committed by its own word in this House never to remain after 12 o'clock at night. Surely we should not allow Liberal Members to breach their own word.

Mr. Cyril Smith: Further to that point of order, Mr. Speaker. May I suggest that you apprise the hon. Member for Nottingham, West (Mr. English) in your ruling that Liberal Members are quite capable of looking after themselves and that if we wanted anyone to help us it would not be the hon. Gentleman to whom we would turn.

Mr. Speaker: Fortunately this is not a matter for the Chair.

Amendment proposed, No. 74 in page 13, line 17, leave out "of that section".—[Mr. Kaufman.]

Question put, That the amendment be made:—

The House divided: Ayes 208, Noes 13.

Division No. 261
AYES
11.59 p.m.


Allaun, Frank
Davidson, Arthur
Henderson, Douglas


Archer, Peter
Davies, Bryan (Enfield N)
Hooley, Frank


Armstrong, Ernest
Davies, Denzil (Llanelli)
Howell, Denis (B'ham, Sm H)


Ashton, Joe
Davis, Clinton (Hackney C)
Hoyle, Doug (Nelson)


Atkins, Ronald (Preston N)
Deakins, Eric
Huckfield, Les


Bagier, Gordon A. T.
Dean, Joseph (Leeds W)
Hughes, Mark (Durham)


Bain, Mrs Margaret
de Freitas, Rt Hon Sir Geoffrey
Hughes, Robert (Aberdeen N)


Barnett, Guy (Greenwich)
Dempsey, James
Hunter, Adam


Barnett, Rt Hon Joel (Heywood)
Duffy, A. E. P.
Irvine, Rt Hon Sir A. (Edge Hill)


Bates, Alf
Dunn, James A.
Irving, Rt Hon S. (Dartford)


Bean, R. E.
Dunnett, Jack
Jackson, Miss Margaret (Lincoln)


Bennett, Andrew (Stockport N)
Dunwoody, Mrs Gwyneth
John, Brynmor


Bishop, E. S.
Edelman, Maurice
Jones, Alec (Rhondda)


Blenkinsop, Arthur
Edge, Geoff
Jones, Barry (East Flint)


Booth, Albert
Ellis, Tom (Wrexham)
Jones, Dan (Burnley)


Boothroyd, Miss Betty
English, Michael
Kaufman, Gerald


Bottomley, Rt Hon Arthur
Evans, loan (Aberdare)
Kerr, Russell


Boyden, James (Bish Auck)
Evans, John (Newton)
Kilroy-Silk, Robert


Bray, Dr Jeremy
Ewing, Harry (Stirling)
Kinnock, Neil


Brown, Hugh D. (Provan)
Fernyhough, Rt Hon E.
Lambie, David


Brown, Robert C. (Newcastle W)
Fitch, Alan (Wigan)
Lamborn, Harry


Buchan, Norman
Flannery, Martin
Lamond, James


Callaghan, Jim (Middleton &amp; P)
Fletcher, Ted (Darlington)
Leadbitter, Ted


Campbell, Ian
Fowler, Gerald (The Wrekin)
Lewis, Ron (Carlisle)


Canavan, Dennis
Fraser, John (Lambeth, N'w'd)
Lipton, Marcus


Carmichael, Neil
Garrett, John (Norwich S)
Litterick, Tom


Carter-Jones, Lewis
Garrett, W. E. (Wallsend)
Loyden, Eddie


Clemitson, Ivor
George, Bruce
Lyons, Edward (Bradford W)


Cocks, Michael (Bristol S)
Gilbert, Dr John
McCartney, Hugh


Cohen, Stanley
Golding, John
MacCormick, lain


Coleman, Donald
Gourlay, Harry
McElhone, Frank


Conlan, Bernard
Graham, Ted
MacFarquhar, Roderick


Cook, Robin F. (Edin C)
Grant, George (Morpeth)
McGuire, Michael (Ince)


Corbett, Robin
Grant, John (Islington C)
Mackenzie, Gregor


Cox, Thomas (Tooting)
Hamilton, James (Bothwell)
McMillan, Tom (Glasgow C)


Craigen, J. M. (Maryhill)
Hardy, Peter
McNamara, Kevin


Crawford, Douglas
Harper, Joseph
Madden, Max


Crawshaw, Richard
Harrison, Walter (Wakefield)
Marks, Kenneth


Cryer, Bob
Hart, Rt Hon Judith
Marquand, David


Cunningham, Dr J. (Whiteh)
Hatton, Frank
Marshall, Dr Edmund (Goole)


Dalyell, Tarn
Hayman, Mrs Helene
Marshall, Jim (Leicester S)




Maynard, Miss Joan
Rodgers, George (Chorley)
Tinn, James


Mellish, Rt Hon Robert
Rodgers, William (Stockton)
Tomlinson, John


Mikardo, Ian
Rooker, J. W.
Torney, Tom


Millan, Bruce
Ross, Rt Hon W. (Kilmarnock)
Urwin, T. W.


Miller, Dr M. S. (E Kilbride)
Rowlands, Ted
Varley, Rt Hon Eric G.


Mitchell, R. C. (Solon, Itchen)
Ryman, John
Wainwright, Edwin (Dearne V)


Molloy, William
Sandelson, Neville
Ward, Michael


Morris, Alfred (Wythenshawe)
Sedgemore, Brian
Watkinson, John


Morris, Charles R. (Openshaw)
Selby, Harry
Watt, Hamish


Mulley, Rt Hon Frederick
Shaw, Arnold (llford South)
Weitzman, David


Murray, Rt Hon Ronald King
Silkin, Rt Hon John (Depttord)
Welsh, Andrew


Newens, Stanley
Silkin, Rt Hon S. C. (Dulwich)
White, Frank R. (Bury)


Noble, Mike
Sillars, James
Whitlock, William


Oakes, Gordon
Silverman, Julius
Wigley, Dafydd


O'Malley, Rt Hon Brian
Skinner, Dennis
Williams, Alan (Swansea W)


Orme, Rt Hon Stanley
Small, William
Williams, Alan Lee (Hornch'ch)


Ovenden, John
Smith, John (N Lanarkshire)
Williams, W. T. (Warrington)


Owen, Dr David
Spearing, Nigel
Wilson, Alexander (Hamilton)


Palmer, Arthur
Spriggs, Leslie
Wilson, Gordon (Dundee E)


Park, George
Stallard, A. W.
Wilson, William (Coventry SE)


Parker, John
Stewart, Donald (Western Isles)
Wise, Mrs Audrey


Pavitt, Laurie
Stoddart, David
Woodall, Alec


Phipps, Dr Colin
Stott, Roger
Woof, Robert


Prescott, John
Strang, Gavin
Wrigglesworth, Ian


Price, C. (Lewisham W)
Strauss, Rt Hon G. R.
Young, David (Bolton E)


Price, William (Rugby)
Taylor, Mrs Ann (Bolton W)



Reid, George
Thomas, Mike (Newcastle E)
TELLERS FOR THE AYES:


Richardson, Miss Jo
Thomas, Ron (Bristol NW)
Mr. J. D. Dormand and


Roberts, Albert (Normanton)
Thompson, George
Mr. John Ellis


Roberts, Gwilym (Cannock)
Thorne, Stan (Preston South)





NOES


Beith, A. J.
Penhaligon, David
Winterton, Nicholas


Brotherton, Michael
Ross, Stephen (Isle of Wight)



Gower, Sir Raymond (Barry)
Smith, Cyril (Rochdale)
TELLERS FOR THE NOES:


Hooson, Emlyn
Steel, David (Roxburgh)
Mr. Clement Freud and.


Johnston, Russell (Inverness)
Thorpe, Rt Hon Jeremy (N Devon)
Mr. Geraint Howells.


Pardoe, John
Wainwright, Richard (Colne V)

Question accordingly agreed to.

Clause 19

RELAXATION OF REQUIREMENTS AS TO APPROVAL OF ACTIVITIES OF THE NATURAL RESEARCH DEVELOPMENT COUNCIL

Amendment proposed, No. 75, in page 14, line 14, at end add:
'and after that paragraph there shall be added (but not as part of it) the words "and any statutory instrument made by virtue of this subsection shall be subject to annulment in pursuance of a resolution of either House of Parliament"'.—[Mr. Kaufman.]

Question put forthwith, That the amendment be made:—

The House proceeded to a Division, and Mr. SPEAKER stated that he thought the "Ayes" had it, and, on his decision being challenged, it appeared to him that the Division was unnecessarily claimed, and he accordingly called upon the Members who supported and who challenged his decision successively to rise in their places; and he declared the "Ayes" had it, three Members only who challenged his decision having stood up.

Amendment agreed to.

New Clause 1

ARBITRATION OF DISPUTES RELATING TO VESTING AND COMPENSATION ORDERS

'(1) Any dispute to which this section applies shall be determined under Schedule [arbitration] to this Act.

(2) Where any such dispute has been submitted to a tribunal constituted under that Schedule, any other dispute to which this section applies shall be determined by the same tribunal.

(3) This section applies to any dispute which arises in connection with a vesting order or a compensation order and to which one of the parties is the Secretary of State, the Board or a body corporate whose share capital has vested by virtue of the order in either of them or in nominees for either of them; and where this section applies to a dispute which arises in connection with an order, it also applies to any dispute which arises in connection with a related order.

(4) A vesting order and a compensation order are related for the purposes of this section if they relate to the same capital or assets'.—[Mr. Kaufman.]

Brought up and added to the Bill.

New Schedule

ARBITRATION

PART I

GENERAL

Establishment of Tribunal

1. If a party to a dispute such as is mentioned in subsection (1) of section [Arbitration of disputes relating to vesting and compensation orders] above serves on the other party or parties to the dispute a notice that he wishes the dispute to be determined by arbitration, the Secretary of State shall by order establish a tribunal to determine the dispute and any other dispute such as is mentioned in subsection (2) of that section.

2. An order under paragraph 1 above shall be laid before each House of Parliament.

3. A tribunal shall be a court of record and shall have an official seal which shall be judicially noticed.

4. A tribunal shall, as the Lord Chancellor may direct, either sit as a single tribunal or sit in two or more divisions and, subject to paragraph 5 below, shall, for the hearing of any proceedings, consist of—

(a) a president who shall be a barrister or solicitor appointed by the Lord Chancellor, and
(b) two other members appointed by the Secretary of State, one being a person of experience in business and the other being a person of experience in finance.

5. In its application to proceedings which, by virtue of paragraph 18 below, are to be treated as Scottish proceedings, paragraph 4 above shall have effect with the substitution, for sub-paragraph (a) thereof, of the following sub-paragraph:—
(a) a president who shall be an advocate or solicitor who has practised in Scotland and who shall be appointed by the Lord President of the Court of Session".

6. The members of a tribunal shall hold office for such period as may be determined at the time of their respective appointments and shall be eligible for reappointment but, notwithstanding that the period for which a member was appointed has not expired,—

(a) a member may, at any time by not less than one month's notice in writing to his appointor, resign his office
(b) the appointor of a member may declare the office of that member vacant on the ground that he is unfit to continue in his office; and
(c) if any member becomes bankrupt or makes a composition with his creditors or, in Scotland, if sequestration of a member's estate is awarded or a member makes a trust deed for behoof of his creditors or a composition contract, his office shall thereupon become vacant.

7. If any member of a tribunal becomes, by reason of illness or other infirmity, temporarily incapable of performing the duties of his office,

his appointor shall appoint some other fit person to discharge his duties for any period not exceeding 6 months at any one time, and the person so appointed shall during that period have the same powers as the person in whose place he was appointed.

8. In this Part of this Schedule, "appointor", in relation to a member of a tribunal means—

(a) in the case of a member appointed under sub-paragraph (a) of paragraph 4 above, the Lord Chancellor or, if paragraph 5 above applies, the Lord President of the Court of Session; and
(b) in the case of any other member, the Secretary of State.

9. In Part II of Schedule 1 to the House of Commons Disqualification Act 1975 and in Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (bodies of which all members are disqualified), there shall be inserted, at the appropriate place in alphabetical order:—
An Arbitration Tribunal established under Schedule (Arbitration) to the Industry Act 1975".

10. In Part I of Schedule 1 to the Tribunals and Inquiries Act 1971 (Tribunals under direct supervision of Council on Tribunals) after the entry the first column of which reads "Indemnification of justices and clerks" there shall be inserted the following entry:
Industry. 9A. An Arbitration tribunal established under Schedule (Arbitration) to the Industry Act 1975.".

Staff and expenses

11. A tribunal may appoint such officers as they consider necessary for assisting them in the proper execution of their duties.

12.—(1) There shall be paid to members of a tribunal such remuneration (whether by way of salaries or fees) and such allowances as the Secretary of State may, with the approval of the Minister for the Civil Service, determine.

(2) There shall be paid to any officer appointed under paragraph 11 above and any person to whom proceedings are referred by the tribunal under paragraph 25 below for inquiry and report such remuneration (whether by way of salary or fees) and such allowances as the tribunal may determine.

(3) The Secretary of State shall pay any such remuneration and allowances and any other expenses of a tribunal shall be defrayed by the Secretary of State out of money provided by Parliament.

PART II

PROCEEDINGS

Proceedings other than Scottish proceedings

13. Paragraphs 14 to 17 below shall have effect with respect to proceedings of a tribunal other than those which, by virtue of paragraph 18 below, are to be treated as Scottish proceedings.

14. The provisions of the Arbitration Act 1950 or, in Northern Ireland, the Arbitration Act (Northern Ireland) 1937 with respect to—



(a) the administration of oaths and the taking of affirmations,
(b) the correction in awards of mistakes and errors,
(c) the summoning, attendance and examination of witnesses and the production of documents, and
(d) the costs of the reference and award,
shall with any necessary modifications, apply in respect of such proceedings but, except as provided by this paragraph, the provisions of that Act shall not apply to any such proceedings.

15. A tribunal may, and if so ordered by the Court of Appeal shall, state in the form of a special case for determination by the Court of Appeal any question of law which may arise in such proceedings.

16. An appeal shall lie to the Court of Appeal on any question of law or fact from any determination or order of the tribunal with respect to compensation under section 11(3B) above.

17.—(1) Subject to the provisions of this Schedule, the procedure in or in connection with any such proceedings shall be such as may be determined by rules made by the Lord Chancellor by statutory instrument.

(2) A statutory instrument containing rules made under this paragraph shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Scottish proceedings

18. Where a dispute submitted to a tribunal relates to capital of a body corporate whose principal place of business is situated in Scotland, or assets which are situated in Scotland, then, subject to paragraph 20 below, the proceedings before the tribunal in respect of the dispute shall be treated as Scottish proceedings.

19. If, at any stage in any proceedings before a tribunal which would not otherwise fall to be treated as Scottish proceedings, the tribunal are satisfied that, by reason of the fact that questions of Scottish law arise or for any other reason, the proceedings ought thereafter to be treated as Scottish proceedings, the tribunal may order that they shall thereafter be so treated and the provisions of this Schedule shall have effect accordingly.

20. If, at any stage in any proceedings before a tribunal which would otherwise be treated as Scottish proceedings, the tribunal are satisfied that, by reason of the fact that questions of English law arise or for any other reason, the proceedings ought not to be treated as Scottish proceedings, they may make an order that the proceedings shall thereafter not be treated as Scottish proceedings and the proceedings of this Schedule shall have effect accordingly.

21. In Scottish proceedings a tribunal shall have the like powers for securing the atten-

dance of witnesses and the production of documents and with regard to the examination of witnesses on oath and the awarding of expenses as if the tribunal were an arbiter under a submission.

22. At tribunal may and if so directed by the Court of Session shall state a case for the opinion of that Court on any question of law arising in Scottish proceedings

23.—(1) An appeal shall lie to the Court of Session on any question of law or fact from any determination or order of the tribunal with respect to compensation under section 11(3)(b) above.

(2) An appeal shall lie, with the leave of the Court of Session or of the House of Lords, from any decision of the Court of Session under this paragraph, and such leave may be given on such terms as to costs or otherwise as the Court of Session or the House of Lords may determine.

24.—(1) Subject to the provisions of this Schedule, the procedure in or in connection with Scottish preceedings shall be such as may be determined by rules made by the Lord Advicate by statutory instrument.

(2) A statutory instrument containing rules made under this paragraph shall be subject to annulment in pursuance of a resolution of either House of Parliament.

25. Unless the tribunal consider that there are special reasons for not doing so, they shall sit in Scotland for the hearing and determination of any Scottish proceedings

All proceedings

26. Every order of a tribunal—

(a) shall be enforceable in England and Wales and Northern Ireland as if it were and order of the High Court; and
(b) may be recorded for execution in the books of Council and Session and may be enforced accordingly.

27. A tribunal may, at any stage in any proceedings before them, refer to a person or persons appointed by them for the purpose any question arising in the proceedings, other than a question which in their opinion is primarily one of law, for inquiry and report, and the report of any such person or persons may be adopted wholly or partly by the tribunal and, if so adopted, may be incorporated in an order of the tribunal'.

Brought up and added to the Bill.

It being after Eleven o'clock, further consideration of the Bill, as amended, stood adjourned.

Bill, as amended (in the Standing Committee), to be further considered Tomorrow.

EUROPEAN PARLIAMENT (MEMBERSHIP)

12.12 a.m.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): I beg to move,
That Mr. Guy, Barnett, Miss Betty Boothroyd, Mr. Tam Dalyell, Sir Geoffrey de Freitas, Mrs. Gwyneth Dunwoody, Mr. Tom Ellis, Mr. John Evans, Mr. William Hamilton, Mr. Mark Hughes, Mr. R. C. Mitchell, Mr John Prescott and Mr. Michael Stewart be designated members of the European Parliament:
That this Order be a Standing Order of the House.
I move the motion briefly in order that hon. Members, the Liberal Party in particular, may express certain views upon it. I am sure that it will meet the convenience of the House if I listen to what hon. Members have to say and seek to reply towards the end of the debate.

12.13 a.m.

Mr. Jeremy Thorpe: I beg leave to oppose the motion.
I hope that the events which have just transpired will leave no one in any doubt that my right hon. and hon. Friends feel intense anger and wish to protest strongly at the way in which this matter has been handled, particularly in another place. I hope to refer to the events which have transpired in the expectation that the Chief Whip, who I understand will reply to the debate, will make some comments on them.
This is one of what is apparently to be several stages by which the two Houses of Parliament appoint the full delegation of 36 Parliamentarians who will represent this country at the European Parliament.
Tonight we are being asked to approve 12 hon. Members of this House from the Government side. Therefore, we are being asked to approve a third of the delegation without any indication of the two-thirds, yet unresolved.
We have had certain indications about the other two-thirds of the delegation which I find profoundly disquieting. For this country to decide its delegation to the European Parliament in instalments while the rest of the delegation is shrouded in mystery is a profoundly unsatisfactory way for either House to operate. For the Government to act in this way is contrary to the spirit and

intentions operated to date by at least seven of our partners in the Community.
During the Committee stage of the European Communities Bill on 14th June, 1972, the right hon. Member for Ebbw Vale (Mr. Foot) moved an amendment to the effect that the list of names of proposed representatives of the Houses of Parliament to the European Parliament should be laid in draft form before Parliament and be subject to the approval of the Commons. The then Chancellor of the Duchy of Lancaster, the right hon. and learned Member for Hexham (Mr. Rippon) made every effort to meet the wishes of the right hon. Member for Ebbw Vale and said in the debate:
If it is the wish of the Committee, the Government are perfectly willing to propose the setting up of a Select Committee to consider the ways in which members could be nominated for the European Assembly. That would provide a full opportunity for views to be expressed and examined. The Select Committee could report to the House, and the report could be debated if the House so wished."—[Official Report, 14th June 1972; Vol. 838, c. 1515].
That undertaking was not sufficient for the right hon. Member for Ebbw Vale and when, on 19th December 1972, this House came to appoint the first delegation to the European Assembly, he said:
Not only should we be discussing the actual selection of Members with which this motion is supposed to deal; we should also be discussing the whole nature of the assembly and the way in which any delegation to such a body should be formed and composed. These matters of general principle should have been discussed by the House."—[Official Report, 19th December 1972; Vol. 848, c. 1258]
I respectfully agree with everything said by the right hon. Member for Ebbw Vale.
The only Parliament out of step in this matter in the past was the Conservative Government under the right hon. Member for Sidcup (Mr. Heath) and no one was more critical of them than the right hon. Member for Ebbw Vale. I am anxious that the present Government should not fall into the same traps.
The object of the European Assembly is to represent the peoples of Europe. I cannot speak for other minority parties in this House, but I do speak for a party which, whether the House likes it or not, represents 5⅓ million people in this country and, apart from the meetings we have requested, there has been no indication


from the Government about what they have in mind in relation to Liberal representation on the British delegation. It is extraordinary that we should be asked to vote for one-third of the delegation tonight without having any idea of who is to fill the rest of the places.
Because the delegation has to be drawn from both Houses, it is relevant to look at what we are doing here and what is happening in another place. My strictures are almost exclusively for those in another place. I acquit the Parliamentary Secretary to the Treasury (Mr, Mellish) of any discourtesy or unhelpfulness. He is in the position which Lord Greenwood once hypothecated for Lord Butler of promising every form of assistance short of actual help. We hope to remedy that unhappy situation by the end of this debate. But I make no bones about it that the behaviour of the Government in another place has been a plan of deviousness and discourtesy which it would be very difficult to equal.
What is the object of, and what are the purposes which have to be fulfilled in, the European Parliament? We know that there have been many hon. and right hon. Members who have been highly critical of that Parliament. Bearing in mind the number of Labour Members who were anxious at least to be considered for membership of that Parliament we may take it that much of that opposition has evaporated. There are a few—the last of the Mohicans—who still oppose it, and I pay tribute to them for at least not having put their names forward for inclusion.
The position of the European Parliament is as follows, and it is the view of the secretariat of the European Parliament and is based on the experience of those countries which have been represented in that Parliament. The entitlement to representatives is broadly related to populations of the member countries. The number of representatives per delegation is in no case fewer than six. and entitlement is related to the populations.

Mr. Michael English: Broadly related.

Mr. Thorpe: I would settle for the word "broadly".

Mr. English: Not forgetting Luxembourg.

Mr. Thorpe: The hon. Member should not be too critical of Luxembourg. It has a great contribution to make to the Assembly.
The European Movement published its report on the recommendations to which even that leading Gaullist the right hon. Member for Sidcup has now become converted and in which the right hon. Member for Fulham (Mr. Stewart) played a leading rôle. In paragraph 16 it said, interpreting the basis upon which that European Parliament, should be elected:
The allocation of seats between parties should correspond not to the balance of parties in Westminster but to votes at the previous General Election. This would amount to a 'halfway house' between nomination and a genuine system of direct elections with Proportional Representation.
I merely mention that this has been the basis upon which seven of the other eight have filled their allocations. The French have not made efforts so to do and the British cannot be judged, because one of the major parties has not until now taken up its seats. But there is no question that the basis upon which the membership of that European Parliament is made up is reflective of the votes of the people of those countries.

Mr. English: I take the right hon. Gentleman's point, but he is surely not saying that this was always so.

Mr. Thorpe: I am not, and it was because the Italian Government sought to fill all the places with government representatives that there was what was known as the Hondt Convention which indicated that the Parliament should be representative not only of Governments but, broadly, of opposition parties too. I am therefore in entire agreement with the hon. Member and I am grateful to him for reinforcing my case.
Before I proceed further about the delegation to Europe may I remind the House that at the last General Election the Labour Party polled 11,400,000 votes, the Tory Party polled 10,400,000, the Liberal Party 5,300,000, the SNP 890,000, Plaid Cymru 166,000 and the United Ulster Unionist Coalition 605,000. If the membership of the European Parliament were representative of those votes—and


I am not making that claim since we do not have an electoral system which reflects votes accurately—the position would be 15 Labour, 13 Conservative and seven Liberal representatives, and one SNP and, possibly, one UUUC representative in the European Parliament.

Mrs. Margaret Bain (Dumbartonshire, East): Does the right hon. Gentleman accept that in this situation we must look at the national communities within the United Kingdom? If the Scottish National Party polled that number of votes, which indicates 30 per cent, support within Scotland, surely Scotland is entitled to more representatives within Europe than the Liberal Party, which polled only 8 per cent. of the votes in Scotland.

Mr. Thorpe: I have always taken the view, following the last election, that the Scottish National Party should be represented in the European Parliament. I have also taken the view that there should be direct elections to the European Parliament, so that there is an opportunity for the people of Wales, of the north-east, of Yorkshire or of the west country to be represented on a territorial basis. If the Labour Party is becoming converted to the idea of consulting the people, I welcome that.
The Liberal Party, which, if I am not being indelicate, polled nearly six times the number of votes polled by the Scottish National Party, is a United Kingdom party, yet it is proposed that the Liberal seats should be cut from two to one. [HON. MEMBERS: "Too long."] There is plenty of time. Government supporters should have patience. We have waited long enough for the Labour Party to become converted to Europe.

Mr. Dennis Skinner: The right hon. Gentleman has quoted figures. Does he take cognizance of the fact that although he said that seven of the participating countries are sending their delegations in the manner which he has described—on the ratio of their popular vote in the country—the situation in this country is different? Although the right hon. Gentleman favours proportional representation, Members of Parliament are elected on the basis of single member constituencies. If there is any substance in the argument of having representation

according to the popular vote, why does not the right hon. Gentleman demand, on behalf of the Liberal Party the same number of Members on all the Committees of this House—or do the Members of the Liberal Party not wish to man the Committees?

Mr. Thorpe: I am grateful to the right hon. Gentleman for giving way. He never loses the common touch. [HON. MEMBERS: "You gave way to him."] It is true that I gave way to the hon. Gentleman. The courtesy shown by the hon. Gentleman overcame me.
I reply in two ways. In this House the number of Members of Parliament has not always been the determining factor. The most recent example was what I might loosely call the "Short money", which was determined on the basis not only of membership in this House but of votes in the country. But Mr. Speaker has a difficult task to perform. Mr. Speaker takes account not merely of the numbers of Members of Parliament but the fact that the Liberal Party is a United Kingdom party. In debates on Scotland the interests of the Scottish National Party are considered. To say that we are merely determining matters upon the outcome of a General Election, in which votes are distorted in terms of seats, is a travesty of the fact.
The hon. Gentleman asked why the Liberals were not represented on every Committee. The Liberal Party represents 5⅓ million people but, with only 13 Members of Parliament, it is fully stretched.
I do not believe that the present electoral system is exclusively the determinant of manning Committees, of being called in the House, of representation at the European Parliament, or of representation in another place. I could give a host of examples. That is one of the few ways in which the official channels seek to redress something of the imbalance of our electoral system in this country.
When in 1973 the initial delegations were appointed, there were 18 Conservative Members, there were 15 Labour places offered—that was thought to be the appropriate number by the Prime Minister of the day—there were two Liberals, and one Independent. The suggestion now put forward is that the


Liberal delegation should be cut from two to one. I use the word "suggestion" advisedly, because at no stage has there been any indication from the Government as to what figure they have in mind.
There have been occasions when I have asked the Government if we could have the matter discussed. One has been received with great courtesy, but there has never been any indication as to the numbers they have in mind. But there have been rumours that the Liberal delegation should be cut from two to one, to celebrate the fact that the party which had six MPs in 1973, and two million votes, now has 13 MPs and five million votes. I do not think this is right. There have been a series of rumours. There has been nothing firm. I am placed in this difficulty and it has been accentuated by the behaviour in another place. My hon. Friend the Member for Inverness (Mr. Johnston) is one of the two Liberal delegates in the Assembly. He has served on the Regional Committee and has to date been the sole representative from Scotland. He is also the foreign affairs spokesman of the Liberal Party.

Mr. Peter Kirk: Mr. John Brewis served from this House as a representative from Scotland until the last election, and by hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) has been a representative for Scotland since then.

Mr. Thorpe: I am grateful to the hon. Gentleman and I accept that point. There have been two representatives from Scotland. I am sorry if I failed to mention his two hon. Friends.
The other delegate has been my noble Friend Lord Gladwyn. Whether the House agrees or disagrees with his views, one can at least claim that he has some considerable distinction. He was the first President of the Security Council of the United Nations. He is a former Ambassador to Paris. He is Vice-President of the first Political Committee, he is the rapporteur of the Defence Resolution which is to be discussed in October, and he is the foreign affairs spokesman of the Liberal group.
Having read reports that it is the Government's intention so to devise the delegation that the Liberals will be cut to

one, with 16 Tories, 18 Labour Members and one from the SNP, I asked whether I might discuss the matter with the Prime Minister. It was obviously confidential. The Prime Minister was courteous and helpful, and sought, I think, to put forward a proposal which, had it been successful, might have resolved this particular problem, but it was not feasible. Since then there has been no word whatsoever from the Government.
On Thursday afternoon my noble Friend the Leader of the Liberal peers, Lord Byers, went to see the Lord Privy Seal, the noble Lord Shepherd, to say that there were rumours that the Government were going to resolve this matter simply by putting down a motion on the Order Paper, and asked whether it would be possible at least to speak to the noble Lord before anything happened. The noble Lord found it impossible to make contact with my noble Friend until nine o'clock the next morning, by which time my noble Friend Lord Gladwyn, and everybody else, had been told on the radio that a delegation of ten was to be appointed—six noble Lords from the Labour benches, and four noble Lords from the Conservative benches. What transpired, therefore, was that the noble Lord, Lord Gladwyn and the noble Lord, Lord O'Hagan, were automatically dropped, and the first they heard about it was on the radio.
If we can believe what is in the newspapers—because no one has said anything else about it—there are to be 12 hon. Members from the Labour side, 12 from the Conservative side, one Liberal and one from the SNP, making a total of 26. The fact that there are ten peers means that there will be no vacancies for anybody else.
I find it staggering, first, that we should never have been consulted. The Government simply put down a motion the effect of which was to discharge an existing member of the delegation, without any consultation. I assume that the Government must have consulted the Tory Party, because two Tory Peers were dropped. Unless the noble Lord, Lord Shepherd, carried out his axe on the Tory delegation as he did on our own delegation from another place, I assume that the Tory Party was consulted. If it were not, it makes it even worse.
Even on the basis that the Liberal delegation was cut to one, the Government might, as a matter of courtesy, have asked which of our two delegates we wished to retain.
Therefore, I think that this matter has been handled appallingly. The Government have decided simply on numbers. They have been close. They have not told anyone what they have decided. They have simply used the Order Paper in another place to announce which delegate they will drop.
I say to the right hon. Gentleman—[Interruption.] The hon. Member for Keighley (Mr. Cryer) may not like it, but there is a queue of Labour Members who are crawling to get into the European Parliament. There is a queue of 50 Labour Members seeking to get in. The hon. Gentleman may not be on the list. But there are 50 who, having said that it is the most appalling disease, are trying to get inoculated with it as soon as possible.
There would be no British delegation in the European Parliament if it had not been for the Liberal vote in this House on the European Communities Bill when the Tories were in power, and this Government would not have got a majority in the House approving the renegotiated terms if it had not been for the Tory and Liberal votes, and they know it.
We Liberals happen to mind about Europe. Unlike some in this House, we happen to have been totally consistent from the beginning. I think that I am the only Member of this House to have been attacked physically on the issue of Europe. One of my hon. Friends was spat at by one hon. Lady in the Labour Party for whom one might find a charitable explanation.
All that I say is that it is an outrage that, when the European Parliament seeks to represent the peoples of Europe, this is the moment when the Government, without consultation, take the representation of one of the minority parties in this country and cut it in half and, what is more, decide which one to jettison.

Mrs. Gwyneth Dunwoody: I wonder whether the right hon. Gentleman would mind repeating what he said just now? Am I right in thinking that he said that there was a queue of 50 Labour

Members wishing "to crawl into Europe"?

Mr. Thorpe: The hon. Lady is wholly correct in that, following the referendum in which a majority of the Parliamentary Labour Party expressed themselves against the concept of Britain's continued membership of the European Community because they opposed all that it stood for, they opposed the European Assembly as being parasites, as being a talking shop and as being an expensive luxury, the Government had no difficulty in finding 50 hon. Ladies and hon. Gentlemen overnight who were queueing up to be part of the Labour delegation. If the hon. Lady asks whether I believe that the word "crawling" is the proper verb, may I say that it was the verb which I chose to use, and that I do not seek to retract it.

Mrs. Dunwoody: Would the right hon. Gentleman not accept that it is not for his party to take upon themselves the honour of deciding who shall represent the British people in an assembly that is not an elected assembly? He must accept that those who have different views still represent a good many people in this Island and will continue to speak their minds without needing to crawl anywhere.

Mr. Thorpe: I would prefer that no one in this House decided who represented us in Europe. I should prefer the British people to decide it by direct elections. I hope that by 1978 we shall have direct elections, as the hon. Lady will discover.
The hon. Lady is saying that there will be people on that delegation who are opposed to the concept of Europe, that they are entitled to be there and that they will make their views heard. I entirely agree. There are 5⅓ million people who voted Liberal and they, equally, are entitled to be heard and represented in that Parliament. I am not even asking that they should be represented in proportion to the vote which we got, which would entitle us to seven seats. I am merely saying that having polled 2 million votes, having six Members of Parliament and having been represented by two Members—one from this House and one from another place—I believe that it would be manifestly unfair for that allocation to be cut. With 13 MPs and 5⅓


million votes behind us, I believe that I can carry the hon. Lady with me in saying that that is a reasonable assertion.

Mr. Bob Cryer: Is it in order, Mr. Deputy Speaker, for the right hon. Member for some obscure constituency in Devon to describe Labour Members as crawling into Europe and to imply that some of us actually applied to go to the European Parliament although we made no such application? Nor have we made any application to London and Counties Securities Ltd.

Mr. Deputy Speaker (Mr. George Thomas): The right hon. Gentleman takes responsibility for his own speech, but I have heard many worse expressions than "crawling".

Mr. Thorpe: If I have in any way offended the well-known sensibilities of the hon. Gentleman, of course I express my condolences. If his contempt for my constituency is such as he has indicated, it may explain why the Labour Party so often loses its deposit.
In case the hon. Gentleman did not hear, I expressly excluded him from the list of those who queued up to go to Europe because I know that there is no keener or more forthright supporter of the manifesto than the hon. Gentleman and I know that he is not among those who wish to go to Europe. Indeed, I should have been profoundly surprised if he were.
I hope that the Government will realise that in this House there are not two parties but six. Apart from the two major parties, the other four parties represent 7 million people in this country. They are entitled to be consulted. The irony of this situation is that the way in which the Liberal Party is being treated comes at the precise moment when this country, having joyfully welcomed the somersault of 1962 from this side, has welcomed the somersault of 1974 from that side. At last the Labour Party has confirmed its membership of the Community, which I welcome.
I want our delegation to be representative of the people of this country and I do not believe that the way in which the Government are carving it up—no doubt with talks with the Opposition—is the way to go about it.
There is much to look at in the figures which the right hon. Member for Sidcup thought to be the correct apportionment between the Government, the Opposition and the minorities, and that might well be a starter for the right hon. Gentleman the Chief Whip. I agree with the Secretary of State for Employment that this is a matter on which we should appoint a Select Committee.
To have one-third of the delegation appointed from this House, for the Labour peers to put in a list of Members who they think might get in and then to see what is left over and sweep up the bits is not the way in which the Government and Parliament should appoint their representatives to the European Assembly. It must be representative of the people.
For that reason I hope that the Government will consider taking the advice of the Secretary of State for Employment and set up a Select Committee. If they do that at least they will approach the problem as good Europeans—which I hope they are now intending to be—and prevent a grave injustice not only to the Liberal Party but to the principles upon which the members of the European Assembly are empanelled. For these reasons I protest at the way the Government have behaved, particularly in another place, and I look to the right hon. Gentleman to see that justice is done.

12.46 a.m.

Mr. Maurice Edelman: The theme of the debate is parliamentary democracy, and I do not apologise for detaining my hon. Friends for a few minutes in pursuing that subject. The importance of the theme is illustrated by the presence in large numbers of my hon. Friends and, indeed, of the Liberal Party, but I find it contemptible that so few Tories have turned up to discuss a matter which should be of as much importance to them as it is to the rest of us.
I declare a negative interest in this subject. I am not one of those who submitted his name for inclusion in the list of delegates to Strasbourg, and I can therefore take a clinical interest in the subject. At the same time, I have a great deal of sympathy for the right hon. Member for Devon, North (Mr. Thorpe) in his


indignation at having had his delegation cut by 50 per cent. After all, the cut was made as a result of a process of consultative patronage.
The essence of the nomination of delegates to Strasbourg is laid down in Article 138(1) of the Treaty of Rome, which states:
delegates who shall be designated by the respective Parliaments from among their members in accordance with the procedure laid down by each Member State.
The significance of that Article of the Treaty of Rome is that the nomination of delegates should be a matter for Parliaments and not for Governments. In other words, the less the patronage involved in the nomination of members the greater the degree of democracy that is achieved.

Mr. Cyril Smith: The hon. Gentleman spoke of the procedure to be followed by the nominating country. Will he explain the procedure to a simpleminded person like myself? Some of us know our limitations and are prepared to admit them. Others pretend to have qualities that they do not have. We are talking not about how many Members shall go to Strasbourg but the procedure to be followed to determine that number. One of our major concerns is that no procedure is laid down.

Mr. Edelman: It is for the Chief Whip to reply to that question. I found a formula for it when I referred to a system of consultative patronage, which is the way in which this delegation has emerged.
In reply to what the right hon. Gentleman said about the nature of the delegation, I say at once that the delegation which has emerged and which is named on the Order Paper is an admirable one. It covers a broad spectrum of attitudes and ideas about Europe. I find it in no sense a disadvantage that among those listed there are men and women who have been opposed to the European idea. The remarkable thing is that the air and hospitality of Strasbourg have a rapidly Europeanising effect. It is extraordinary how many delegates who arrive at the Council of Europe, for example, as bitter anti-Europeans return enthusiastically European.

Mr. Thorpe: I have not sought to criticise the individual members of the delegation. That is not for me to do. I

have said how extraordinary it was that there was a very long queue—[HON. MEMBERS: "Crawlers."]—Yes, crawling indeed. Does not the hon. Gentleman agree that it is very odd to appoint a delegation of 36 by instalments? That is all that I am saying.

Mr. Edelman: Let us deal first with the nature of the delegation. Whilst presumably a considerable number of the 47 applicants for membership of the delegation were anti-Marketeers, I see no reason why they should not seek to present their views and attitudes at Strasbourg, especially in a post-referendum climate. I see nothing dishonourable in such hon. Members proposing themselves for inclusion in the delegation. I am sure that out of the general discussion there will emerge a synthesis of opinion which can only redound to the honour and wisdom of the British delegation.
I have been for many years a pro-Marketeer, but I hope that after tonight no more base motives will be imputed to those who took an anti-Market point of view.

Mr. William Molloy: Does my hon. Friend agree that what the Liberals have been arguing tonight is that it is quite all right for them to use a political system of which they strongly disapprove in order to enter this Parliament but they do not allow such liberalism to other people to join an organisation approved by the people but which some were not in favour of? Hence we have had from the Leader of the Liberal Party views reaching almost the pinnacle of hypocrisy.

Mr. Edelman: It is not my purpose to accuse the Leader of the Liberal Party of hypocrisy. On the contrary, if the composition of the delegation to Strasbourg were determined by honourable consistency in support of the European idea, in the face of much opposition, the Liberal Party and its leader would be entitled to a much larger representation than they have. I am obliged to concede that, in fairness.
But I was astonished that the right hon. Gentleman deployed an argument ad hominem. One of his major arguments was in favour of Lord Gladwyn, a most distinguished European, whose honours were listed by the right hon. Gentleman.


Lord Gladwyn has consistently fought for the Common Market. His ideas on Europe have become the common currency of discussion throughout Europe. Yet the argument that any individual may be indispensable was long ago refuted by M. Clemenceau, when he said that the cemeteries were full of indispensable men. That argument could well be applied to any individual whose case was argued in the House. The matter cannot be resolved by arguing the merit of any individual, however distinguished.
The fact is that the real matter which we should consider is not so much what the merits or even the demerits of individuals may be, but what is the method of selection. That is ultimately the matter that must be decided.
If I could attract the attention of my right hon. Friend the Government Chief Whip, I should like to turn to one aspect of that matter. In these matters of selection and patronage, we ought to consider the democratic or anti-democratic nature, for example, of some of those delegates who are drawn from their Lordships' House. It is extraordinary to note how many of them have been failed candidates at the hustings in the country generally. Having failed at the hustings they were then sent to the House of Lords. Having arrived there, they are given a further degree, so to speak, in anti-democratic practice, by being directed to Strasbourg, where they then become Members of Parliament for Europe.
I ask the Patronage Secretary whether that is his conception of democracy or whether it is what was meant when we fought for a referendum in order to establish the democratic right of the people to assert their case.
I say that because it is time that we woke up to some of the realities of patronage and the way in which it is exercised and distributed like confetti over a broad range of those who come to the altar in order to enjoy the benefits of political matrimony. They are there now possessed of this gradual elevation. This is the continuing process of antidemocracy—first to the House of Lords, then the Council of Europe, and finally ending up as Members of Parliament for

Europe. What a rise and what an accession! We should look at this matter very carefully.
That is why, when I said that this was an important debate for parliamentary democracy, I meant not only the fact that the Liberals may feel perhaps justly and deeply aggrieved but, much more profoundly, that more and more the system of patronage has been reaching out fingers into public life. Systems of governmental intervention have had their camp followers, who followed in order to pick up the available pickings.
In looking at the motion we must concern ourselves with the essence of what parliamentary democracy is, how it is applied and whether the bad old days which Walpole knew in such abundance are not returning. I believe very firmly that if we are to have any kind of European Parliament, that Parliament should be elected by direct vote and involve direct representation. That is the only way in which we can have a popular vote.
Those of us on the Government side of the House who supported through our manifesto the idea of the referendum should say to ourselves that even if this particular list of people is accepted on this occasion, it should encourage us to urge more strongly for the future that there should be a system of direct representation and direct elections. Only then shall we be able to have a real European Parliament.

12.59 a.m.

Mr. Douglas Henderson: I wish to say how concerned and surprised I am with the way in which the selection of hon. Members on the list has been dealt with by the Government.
Listening to the recital given by the right hon. Gentleman the Leader of the Liberal Party, I appreciated how much easier the original selection must have been, because then the Labour Party was in Opposition and took the view, quite properly, that it felt that it could not participate in this European Assembly until there had been a fair vote on the subject by the people—a view with which my hon. Friends and I entirely agree. At that time it was also relatively simple in that there were basically three


parties in the House whereas now there are several more.
I can appreciate the difficulties which the Parliamentary Secretary to the Treasury and his colleagues have had in dealing with this situation. However, the point has been reached when there has been just too much rumour and confusion and too much newspaper speculation, which I had hoped that the Parliamentary Secretary would clarify when he moved the motion tonight.
Let me make my position clear. I did not wish to apply to go to the European Parliament. In fact, my party has had great problems trying to persuade one of its Members to go. However, we have decided that with the referendum decision behind us it is right that we should be entitled to a voice in Europe. Therefore, we have made a nomination. As an independent country Scotland would be entitled to 10 representatives in the EEC Assembly. On that basis I think that our request for one representative is modest and in keeping with the way in which we conduct ourselves in this House and in the country.

Mr. David Steel: The hon. Gentleman has said that his party has made a nomination. Was the hon. Gentleman's party invited to submit a nomination? The Liberal Party did not receive such an invitation.

Mr. Henderson: I do not intend to contradict myself when I say that we behave in a modest way, but I was totally immodest in that I wrote to the Government Chief Whip and submitted a nomination to him. I hope that clears up that point.

Mr. Steel: Was an assurance given?

Mr. Henderson: In response to the hon. Gentleman's remark from a sedentary position, no assurance has been given to us by anyone.
Tonight we expect the Government Chief Whip to clear up the confusion and to make the basis of representation quite clear. We expect him to make it clear whether my hon. Friends are to be represented.

Mr. Russell Johnston: There were Press reports that the Leader

of the House had offered the hon. Gentleman's party a place. Is that true?

Mr. Henderson: The hon. Gentleman should know that Press reports are a poor basis on which to base decisions of that kind. The question can be answered categorically, unlike the answers that we tend to get at Question Time. The answer is "No".
We are in the unfortunate situation that part of this matter has to be dealt with in another place. There is the difficulty of understanding the implications of what is being done or not being done in another place. I would have thought that the Government could introduce one motion with a list of names representing those Members who were to be nominated. That would have made the position clear from the start.
I confidently expect that when the Government Chief Whip sums up he will put all this speculation to rest. I hope that in his usual blunt and forthright manner he will explain the position in exact terms.

1.3 a.m.

Mr. Russell Johnston: I make no bones about this matter. I think that what has happened has been utterly shameful. What the Government have said, as has been described by the leader of my party, is a disgrace in itself. But much more important than that is the complete failure to adjust to the fact that we are in a new situation and about to send a full delegation to a Parliament which will be a permanent feature of the representative democracy of this country.
The hon. Member for Coventry, North-West (Mr. Edelman) has pointed out that the nub of the question is how the delegation is selected. The Conservative Opposition have connived with the Government in the attitude that they have adopted. The Conservative Opposition's posture in all this has been utterly extraordinary. I am amazed that the hon. Member for Saffron Walden (Mr. Kirk) should sit on the Conservative Front Bench and not raise his voice once on the matter despite the fact that we have served with him in the European Parliament these past two-and-a-half years. Furthermore, the Conservative Party has not raised its voice in this matter.
How is the delegation selected? The Government's original commitment was


that they were entitled to have a majority of 19 out of 36. But the European Parliament is not a place for governments; it is a place for representatives of the people of Europe.
The Governments of the Community have their places and vetoes in the Council of Ministers. That is where the national interest is safeguarded—not in the European Parliament. [An HON. MEMBER: "What has the European Parliament done?"] Let me tell the House what it has done by quoting the spokesman of the Social Democratic Group at the European Parliament when we debated direct elections at the beginning of the year. This is what was said in the European Parliament debate by the spokesman of the Social Democratic Group, Mr. Schmidt:
There are politicians in Europe who feel that the European Parliament will probably never have sufficient powers for effective supervision of the enormous organisation which has arisen here. There are some who say that it would be better to let parliamentary sovereignty remain with the national parliaments. I should like to point out that whoever says this has failed to recognise the slow undermining of democracy, the quiet sapping of the powers of the national parliaments and their replacement by unsupervised actions, by an impenetrable jungle. Decisions involving sums of thousands of millions are taken without any democratic supervision. Anyone who pleads for the retention of the sovereignty of the national parliaments, even in a European context, is essentially attacking parliamentary supervision. This is something which we Socialists cannot accept. What we need is adequate democratic supervision, since the only Europe which has a future is a Europe with democratic structures. This is what we want …".
That speech was greeted by what is called "Loud applause". But on the subject of what would be achieved, the view was that the situation was different because clearly the Community is composed of countries of different sizes. There is an obvious difficulty in regard to meetings in Luxembourg and Mr. Schmidt recognised that problem by saying:
… if we look at the case of Luxembourg, the proposal does not fully reflect this principle. Wherever a principle is breached, there is a danger spot, and we must ask ourselves how we are to escape from this dilemma. I think there are two things we need: representation which is as fair and balanced as possible on the one hand, and a Parliament which is capable of working on the other.
The call went out for that Parliament to be genuinely representative and for it

not to be made so clumsy that it would not work properly. I ask Labour Members whether they think it right for 5,250,000 Liberal voters to be represented at the European Parliament by only one person. I do not think they can say that it is right.

Mr. Molloy: Does the hon. Gentleman want peers to represent him?

Mr. Johnston: If the hon. Gentleman wants my view on peers, I could dilate for a considerable period of time. I am not particularly in favour of a second Chamber which in part depends on the privilege of luck and in part on the privilege of patronage. However, we must operate within the situation in which we are and that is that we have 13 Members here and we should have, on a proportionate basis, 115. We have to do the work of 115.

Sir Geoffrey de Freitas: Dear, dear.

Mr. Johnston: It is all very well for the right hon. Member for Kettering (Sir G. de Freitas), a nice European with a long record, to say "Dear, dear", but that is the fact of the matter. The trouble with the Liberal Party over many years is that we have been so decent, reasonable, and fair that nobody has taken a blind bit of notice of the fact that we have suffered from a gross injustice. If this is to be carried into the European Parliament, it is time to stop.

Mr. Norman Buchan: I was interested on the point about peers. Will the hon. Gentleman agree—knowing that I have given up quite a lot to oppose the Common Market and that I did not apply to go to the European Parliament—that it would be wrong for any of us in the House to describe others as "crawling" into that place. Will the hon. Member for Inverness (Mr. Johnston) repudiate that term?

Mr. Johnston: It is a phrase which people choose for themselves. They speak for themselves and I am not going to adjudicate on adjectives.—[HON. MEMBERS: "It is a verb."] My grammar is faulty.
The point I had been making was that the situation is grossly unfair. Let me give a further instance of the way in


which this works in practice. As my right hon. Friend the Member for Devon, North (Mr. Thorpe) said, if the British delegation were chosen on the same basis as those from Belgium, the Netherlands, Germany, Luxembourg, Ireland and Denmark, the breakdown would be 15 Labour, 13 Conservative, seven Liberal and one SNP Member. If the Patronage Secretary and the Government propose that our figure should be one, we shall be six fewer than we would otherwise be. That not only has an effect on Liberal voters in the United Kingdom but a direct effect on the political position of the European Parliament, the views it expresses, the composition of committees, and the composition of groups within it.
The consequence of what the Government do is not only to deprive Liberals and possibly the SNP of votes to which they are entitled but also to reduce the votes of the Liberals in the Community as a whole and to increase unreasonably the votes of both Conservative and Labour. The Conservative Party has been so mute and miserable throughout today. I read in the newspapers that it is Freedom Day, and Freedom Day has been the occasion for a speech at a great rally by the Leader of the Opposition who said that freedom is indivisible. But when it comes to a gross injustice of this sort, we hear nothing from the Conservative Party. It is despicable.
I should like to make a number of individual points on the statement which we all recall the Prime Minister making on 9th June. That statement was rightly intended, to take the country a stage further out of the argument in which we had been bitterly locked into a new situation. The right hon. Gentleman said:
I hope that… the country as a whole will follow the lead which the Government intend to give in placing past divisions behind us, and in working together to play a full and constructive part in all Community policies and activities."—[Official Report, 9th June 1975; Vol. 893, cc. 29–30.]
Is the way that the delegation has been chosen an example of that?
It has been pointed out that the Labour delegation will consist of some who were for and some who were against entry into the Common Market. I agree that it is reasonable, fair and right to have a balance of different points of view within the Labour Party. But if it is right that the

Labour Party be balanced in that way, how can it possibly be right that such a large section—18.3 per cent.—of the population of the United Kingdom be not represented?
The hon. Member for West Lothian (Mr. Dalyell) shakes his head, but that is the fact. He may like it or not, but that is the fact. That is the way that our Community partners judge their democracy. In the end this Mother of Parliaments will have much more to learn than to give on questions of democracy within the Community, which is different from what was originally expected. Indeed, the emphasis that was laid on enthusiasm for entry by, for example, the Dutch and the Germans was because of the democratic impetus that we could give to the European Community. It did not work out that way at all. At this rate, it does not look like working out that way either.

Mr. Tam Dalyell: In my own defence, I should point out that I was shaking my head at some wise words of my hon. Friend the Member for Hayes and Harlington (Mr. Sandelson), and I missed what the hon. Gentleman was saying.

Mr. Johnston: I should be delighted to repeat what I said for the hon. Gentleman's benefit. But I will rely upon the fact that the hon. Member for Hayes and Harlington (Mr. Sandelson), being wise, will have kept one ear open and will relay it to him.
The Prime Minister, as reported at col. 36, said that the delegation should be representative. I think that is evidence from the Prime Minister that that was the intention of the Government.
There it is. I hope that when the Government discuss and consider this matter between now and Thursday, when I understand the motion comes up in the House of Lords, they will have some second thoughts.
My right hon. Friend the Member for Devon, North said that he was not at this instant seeking to effect so revolutionary a change as to have the Liberal Party proportionally represented. All he was seeking to do at this stage was to ensure that we were not so badly treated as, quite astonishingly, it seem we would be.

Mr. A. J. Beith: Does my hon. Friend agree that the situation would be greatly assisted if the Government were to withdraw the motion, pending the decision in another place on Thursday, so that we could know more clearly what is the position? If they were to do that, the kind of discussion that he has mentioned could then take place.

Mr. Johnston: I entirely agree, but it is not a proposal that the Parliamentary Secretary to the Treasury is likely to accept and I do not believe in asking for something which is out of the question.
I trust that the points that I have made will be borne in mind by hon. Members on the other side of the House who are concerned about democracy and fair play. I know there are a great many of them.

1.21 a.m.

Mr. Michael English: The hon. Member for Inverness (Mr. Johnston) has just illustrated to perfection how much better he speaks on European issues than does the right hon. Member for Devon, North (Mr. Thorpe).
I do not know whether the right hon. Member for Devon, North was aware of it, but during his speech, I could hear mutterings, not necessarily adverse, from my hon. Friends behind me. What they said could be approximately translated as meaning that the right hon. Gentleman spoiled what might have been a good case. At one point, he sounded like little Jerry whose rattle had been taken away and at another he made what seemed a perfectly fair point that he was leader of his party and had not been consulted about which of two people should be dropped from the delegation. No doubt my right hon. Friend the Parliamentary Secretary to the Treasury will answer that point if it is valid.
I think the right hon. Member for Devon, North offended the House when he equated acceptance of the majority verdict of the people with crawling. He spoke about democracy and about this Parliament in relation to European Parliaments. I do not understand how he can equate them because ours is the only Parliament of which half is not elected. This Parliament is rather odd, and it sounded extremely odd for the right hon. Member for Devon, North

to be defending democracy on the basis that Lord Gladwyn should be at the European Parliament. He said that Lord Gladwyn was once President of the Security Council, but that was for Mr. Attlee's Government, not for the Liberal Party.

Mr. Thorpe: I do not see what the hon. Gentleman's remarks have to do with the matter. The noble Lord was also a High Commissioner under a Macmillan Government. What has that to do with it?

Mr. English: If the right hon. Gentleman looks back at his speech he will see he was trying to take the past history of Lord Gladwyn and fit it in with his Liberal present. It comes peculiarly from those who make this point about a Member of another place to preach democracy. The other place is not democratic.
I would prefer us to send 36 delegates, all of whom were from the House of Commons, and not have Lord Gladwyn, or any other Labour, Conservative or independent peer on the delegation.

Mr. Dennis Canavan: Not even Lord George-Brown.

Mr. English: The hon. Member for Inverness made an extremely good speech and it would have been better for his party if it had been the only speech from those benches.
The idea that the Liberal Party should be represented in proportion to its votes is another odd idea because, again, it is not votes but Parliaments which are supposed to be represented in the European Assembly.
We have a Parliament which is elected in a particular way. I know what is worrying the Liberals. They have been going around for a week protesting that if there is only one Liberal and one Member of the SNP, this might reveal to the European Assembly that there are actually more Nationalists in this House than Liberals.
What is the Liberal European Assembly proposals in the present draft convention on direct elections for 1978? The right hon. Member for Devon, North may not realise it, but a lot of my hon. Friends believe in direct elections to the European Assembly as well and they are by no means necessarily those who believed that


Britain should remain in the EEC. They might be former anti-Marketeers whose objection to the Community was that it was undemocratic and that we should like it to be democratic. Hon. Members of all convictions on the Government side, supported by hon. Members of all convictions on the Government side, supported by hon. Members of all convictions on the Opposition side, might believe in that, but the draft convention says that in 1978 elections for the European Assembly sould be determined by each member State as it wishes. The implication is that in each member State an electoral law should be passed by the State Parliament to provide for an Assembly directly elected according to the normal electoral laws of those States.

Mr. Russell Johnston: The hon. Member is right. Mr. Patijn, the Dutch Socialist, dodged the question of a system of direct elections, according to a common electoral system to the Euorpean Paliament by 1978. The hon. Member has been talking about democracy. Does he concede that if there were a system of direct elections Britain's allocation would would be 67 and that if that allocation took place under our system it is possible that the Liberty Party would win the same number of votes as now but get no seats? Is that democratic?

Mr. English: It is as democratic as is the system under which the whole of the East Midlands would be entitled to five seats, one per county, whereas Luxembourg, with only perhaps one third the population of the East Midlands, would be entitled to six.
I have no doubt that the day after the first Assembly elections, if we have them in 1978, the Liberal Party will be saying, "We did not get elected". That party had its chance when it was in a majority in this House. It was in favour of our present system then. The moment it ceased to hold a majority here it ceased to favour the system.
The extraordinary assumption that the right hon. Member for Devon, North made was that we should automatically take what is usual in Europe as our guide. He should say that to his own party first, because it advocates not the normal sort of PR system which is used in the Netherlands. Denmark or Scandinavia, but the system which is used only in

Northern Ireland and which has produced the opposite result to that desired by the people there in the last three elections. In each of those elections the Government who were elected suffered a decline in their share of the vote.

Mr. Stephen Ross: Does the hon. Member accept that the Irish Republic had a referendum on the subject of changing its voting system and that the people chose to keep it?

Mr. English: I was referring to the electoral system advocated by the Liberal Party. The result of that referendum was much the same as ours. However, I shall not weary the House with that small point.
I do not believe that the right hon. Gentleman was sincere. If he believed in democracy he would not have referred to Lord Gladwyn, nor would he have spoken so much about the composition of this delegation. He would have made greater reference to the future.

1.30 a.m.

Sir Raymond Gower: I agree with those hon. Members who said that many troubles had arisen as a result of the manner in which the European Parliament delegation was formed. We should look forward to the day when there is some system of election.
I do not agree with those who have suggested that it is objectionable for us to make use of the resources of Parliament in forming delegations. Many demands are made by Committees on the manpower in the House. It is sensible in those circumstances to make up the representation from this Parliament using some of the manpower available in the other place, which is part of the constitutional Parliament. The procedure is sensible and we find no objection to it. A large number of Members of the other place are persons of great experience in our political life who have given long service to the House. Many of those people can be used with great advantage in this situation.
I hope that the Government will explain why this matter has been managed in such a hamfisted way. Whatever the merits of the argument about the size of the Liberal component, it is apparent that the matter has been badly managed. I hope that the right hon. Gentleman will


reassure us on that point. From the evidence which I have acquired as a result of reading about this, a good deal of discourtesy is involved. I am sure that is not desirable in matters of this kind.
I accept that the Government deem it desirable to have a majority of members of the delegation. Surely, this is not vital in this context. This is a new venture. The previous Liberal representation of two members was small. Was it necessary to reduce it to one member? That seems a footling step to take. I hope that the Government will look again at this matter. I cannot applaud the fact that the small Liberal representation has been reduced.

1.34 a.m.

Mr. Emlyn Hooson: The method and the result of the appointment of the delegation to the European Parliament does no credit to our democracy. I am certain that no Government supporter will be proud of the manner in which this is being done, or of the result.
The Government thought it necessary to consult the people in a referendum to decide whether to stay in Europe. Thereafter to deny a large segment of that population its proper voice in Europe takes some answering in a democracy.
As the Opposition have stated the case clearly, I wish to devote myself to one small point. I address the question to the Patronage Secretary. There must have been considerable negotiations between the Government and Opposition Front Bench Members through the usual channels on the question of the delegation. In 1972 the then Prime Minister, now the right hon. Member for Sidcup (Mr. Heath), offered 15 seats to the Labour Party. Eighteen seats were retained for the Conservative Party, two seats were allocated to the Liberal Party and one seat was allocated to an independent peer. Why has the Conservative Party retained 18 seats? That is wrong. It is impossible to justify the contention on any rational or democratic basis, that a party which gained over 5 million votes should have its representation cut from two seats to one seat.
Not one Member opposite has given any justification for this, and I think that the Patronage Secretary should disclose

what negotiations have taken place between the two Front Benches. If one thing stands out a mile in this debate it is that the Conservative Party officially—except for the helpful contribution of the hon. Member for Barry (Sir R. Gower)—has remained silent. The Conservatives are in a conspiracy of silence to ensure that the Liberal delegation is cut to one. They are not prepared to make any gesture at all. I think that the country has a right to know what negotiations have taken place, because the net result of all this reflects no glory on this Government or on democracy in this country nor does the fact that it should ensue in this kind of way.

1.36 a.m.

Mr. Nigel Spearing: I want briefly to comment on one or two points arising more out of the motion than out of the complaints of the Liberal Party. This is an example of some of the difficulties in which we find ourselves on a number of occasions concerning the European Assembly.
As to the matter of delegation numbers, that is for the Patronage Secretary, but I think that some of the things said by Liberal Members can be questioned. I understand their feelings about their 5 million votes and the number of seats they have in the House, but I remind the right hon. Member for Devon, North (Mr. Thorpe) that he represents the people of his constituency just as every other hon. Member represents all the people in his constituency, whichever way they may have voted, or even if they did not vote at all.
That is the fundamental basis of parliamentary democracy in the United Kingdom. We come here as hon. Members first, whatever our party allegiance.
In so far as I have been able to understand it, the organisation of the European Assembly does not operate entirely on that basis. There is a greater emphasis on the party and on the party group. I am glad to see that the right hon. Gentleman nods his head.
This different form of operation will cause difficulties. One of the reasons that I opposed our joining the Common Market was that I could not see how some of the institutional arrangements that exist on the mainland of Europe and those that we have in the United Kingdom


could be joined together without severe difficulties. I think that we are seeing one or two of them tonight.
Another example is the word "delegation" that has been inaccurately bandied around the House. We have used it in a sense in which everybody has accepted it, but I venture to suggest that the Members comprising the delegation are not delegates at all. We are not able to mandate them, and so far as I know they do not report back to this House by laying a report on the Table with the Clerk, in the manner of a Standing Committee or Select Committee. There is no machinery whereby they may do this. Yet nobody has raised this in the discussions we have had about the EEC.
I understand that on Monday next there is to be a debate in the European Assembly on the Political Affairs Committee Draft Interim Report on European Union. Some of the hon. Members who may be appointed tonight will have to decide whether they should support certain motions. The rapporteur of the Political Affairs Committee is Mr. A. Bertrand, and the date of the draft report is 6th September 1974, though no doubt it has been updated since. In the motion for a resolution it is considered
that the European Union must be administered by: a decision-making Centre which will gradually take the form of a genuine European government; a Parliament elected by direct universal suffrage whose agreement must be obtained before any European government decisions can enter into force; a Chamber of States;
and so on.
If they were delegates, we should have an opportunity to discuss this and to suggest to them the way in which they might represent our views. But no such debate will take place, and I suspect that we shall not hear a report from them. I suggest that they are not delegates in the normal sense of the word.
The matter of direct elections has been espoused by many Opposition Members and, for that matter, by some of my hon. Friends. I suggest that if we ever reach that stage, we are in for some considerable difficulties. Every hon. Member knows the difficulty that the public have—and which we have sometimes—in distinguishing between the correct roles of county councillors, dis-

trict councillors and Members of Parliament. We know how a district council or county council will blame the Government, and how the Government will blame the local authority. Very often it is the result of a misunderstanding, deliberate or accidental, between the officials concerned. If we have direct elections of Members to the European Assembly, whatever its powers may be, and if a constituent comes to see his Member of Parliament about something, he will be told to see his European Parliament Member, but the European Parliament Member will say, "This is a matter for the Council of Ministers. You must see your representative at Westminster," The difficulties that I envisage are considerable.
I do not oppose this motion, but I warn the House of certain difficulties to come, and I commend the thought to the right hon. Member for Devon, North that, when it comes to the practicalities of politics, these are difficulties which someone will have to iron out. If we had not joined the European Community, we should not have been troubled by these matters.

1.42 a.m.

Mr. Peter Kirk: The hon. Member for Inverness (Mr. Johnston) accused me of being mute and miserable. Mute I may have been. I thought it only courteous to listen to what hon. Members had to say. Miserable I never am, especially when discussing my favourite subject, which is the European Parliament and the members of it.
We are discussing a motion which, on the surface, appears straightforward. It is to appoint 12 hon. Members from the Labour Party to join those of us who are already there in the European Parliament. If it were just that, I could confine my remarks to three words—"About time, too." But it has been clear from the debate that various other sentiments are surfacing.
One or two remarks have been made, based, I suspect on an article in The Times on Monday, which may of itself have been based on information given to that newspaper by some of those who have spoken in this debate. I cannot be sure about that, but the inaccuracies match each other so neatly that it would seem that they have something to do with each other. I dealt with one of


them in an intervention during the speech by the right hon. Member for Devon, North (Mr. Thorpe) when I pointed out that The Times was inaccurate in suggesting that the hon. Member for Inverness was the sole voice of Scotland in the European Parliament. Despite the powerful oratory of the hon. Gentleman in the European Parliament the Conservative Party had ensured that he had sufficient back-up both from the House of Lords and from the House of Commons. There were other inaccuracies concerned with the numbers game which we have been playing tonight and about which I want to say a few words later.
Perhaps I may begin, though I do not suppose that it will be much consolation, by saying that I have considerable sympathy with the views put forward by the Liberal Party tonight. Those of us who together have borne the heat and burden of the day in the European Parliament may feel that we are entitled on an occasion like this to stand together. Most of the time we were fighting the Labour Party, which tried to prevent us carrying out our European duties. But we had a number of fights to carry on against the Council of Ministers and the Commission, as any Parliament has. I do not think that the Liberal and Conservative Members or the independent Member of the European Parliament coming from this Parliament really disagreed very much about the necessities that we saw.
I certainly pay tribute, as the right hon. Gentleman suggested, to the effort of both the hon. Member for Inverness and to Lord Gladwyn. In passing, perhaps I might be allowed to pay a modest tribute to the Conservative Members who have also contributed a great deal to the development of the European Parliament over the two and a half years we have been waiting for the Labour Party to make up its collective mind. Now that it has done so, we are faced with the question of what we do about the representation of this House and, indeed, another place within the European Parliament.
I have considerable sympathy with the case that the right hon. Member for Devon, North, the hon. Member for Inverness and the hon. and learned Member for Montgomery (Mr. Hooson) have

developed. I have perhaps slightly less sympathy for the hon. Member for Aberdeenshire, East (Mr. Henderson). I recall a visit paid by his hon. Friend the Member for Moray and Nairn (Mrs. Ewing) to the European Parliament last December, at the end of which she came back and said that she was convinced of its translucent virtues and would recommend that her party should participate from then on. Whether the hon. Member for Aberdeenshire, East voted against it or not I would not know, but certainly the Scottish National Party refused at that time to take up any representation.
That party has joined the band wagon subsequent to the referendum. I put it in the same category as the Labour Party. They are both late-comers—converts naturally. We all know that there is much joy in heaven over any sinner who repenteth, and when we have a mass repentence of this kind the joy is enormous. Nevertheless my sympathy for the Scottish National Party is small compared with the sympathy I have for the right hon. Member for Devon, North.

Mr. Gordon Wilson: I appreciate the hon. Gentleman's wish to make political points in the referendum, and the Scottish National Party accepted the decision of the Scottish people in relation to the referendum. Is not the hon. Gentleman prepared to accept fully, however, the fact that the Scottish National Party, being a party with 11 Members of Parliament and having polled 30 per cent. of the vote in Scotland—which is far more than the Conservative Party polled in Scotland—is fully entitled to representation? Would he not, therefore, accept that the SNP, which represents nearly 900,000 people in Scotland, is entitled to representation in the new circumstances in the European Parliament?

Mr. Kirk: The hon. Gentleman, like so many Scotsmen, has intervened too early. I did not say anything about denying his party representation. I said that I had less sympathy for his party than for the Liberals because his party has shown less enthusiasm for the idea and came round to it only when defeated in the referendum. The Scottish National Party was recommended by one of its most distinguished and—it sounds ungallant to say this—one of its oldest


Members in this House in terms of service to join the European Parliament seven months ago and it declined to do so. Now it is jumping on the band wagon. I do not blame it; it has a perfect right to do so and I would not stop it. However, that is a matter not for me but for the Government.
This is a Government motion. The motion in another place is a Government motion. Taking into account hon. Members who are already members of the European Parliament and whose names do not feature on the Order Paper tonight, we have a total of 35 members and there are 36 places. Conservative Members have made their position quite plain. We believe that we are entitled to 16 seats out of those 36. What happens to the other 20 seats is a matter for the Government in negotiation with other parties.
In answer to the hon. and learned Member for Montgomery, there have been no negotiations between the Government and the Conservative Party. We made that assumption because it was the assumption we made in 1972 when we were in government. Perhaps I can caution the right hon. Member for Devon, North not to believe everything he reads on the front page of The Times, because the figures published there were not accurate. In 1972 we had in mind a representation based, as this representation should be based, on the representation of this House in the Assembly of the Council of Europe, which is the only comparable body. No one takes seriously the idea that the Committee of Selection should be involved. At that time there were 18 Members from the Government party, 16 from the main Opposition party—not 15 as has been said twice from the Liberal benches—and two Members from other parties, which at that time meant the Liberal Party. That is what we had in mind then, and that is what we assume that the Government accept now.

Mr. Thorpe: I accept, as the hon. Gentleman says, that there was no consultation at all, but will he confirm that previously there were six noble lords on the Conservative delegation and only four are suggested on the Order Paper? Who took the decision about the two who should be dropped?

Mr. Kirk: I did. I recommended to my right hon. Friend the Member for Finchley (Mrs. Thatcher) the two who should be dropped. We notified the Government Chief Whip in the House of Lords that we would drop those two. There was no pressure on us from the Government to drop two. The decision I took was a painful one because both noble Lords had worked extremely hard. The decision was merely communicated to the Government because it was their motion and the matter was entirely in their hands. It was not for us to do more than indicate, as we did, that we accepted that as we were now in opposition we lost two seats and to tell the Government the two we would give up. The Government framed their motion in another place taking account of that. That is all that happened.

Mr. Hooson: The hon. Gentleman has detailed how the delegation was appointed in 1972. Will he explain how the independent Lord O'Hagan came into it?

Mr. Kirk: Hon. Members are so impatient. I clearly was not either as mute or as miserable as the hon. Member for Inverness suggested. Once it became plain that the Labour Party would not take up the 16 seats allocated to it, the independent peers went to the then Leader of the House of Lords, Lord Jellicoe, and said that they would like to nominate a Member. The then Leader of the House of Lords said to Lord Strang, who had approached him, that in those circumstances he could not object but that if the Labour Party subsequently wished to nominate Members the nomination of the independent peer would lapse. That position was made plain to the independent peers in 1972. No offer was made by the Government at that time. I was responsible for forming that delegation in company with the Government Chief Whip and the Prime Minister of the day. I know precisely what happened, and what has been printed in the newspapers and said here tonight is not wholly accurate.

Mr. David Penhaligon: On what basis does the hon. Gentleman say that the Conservative Party deserves 16 of the 36 Members? Sixteen out of 36 is 44 per cent., which is more than the


Conservative Party polled at the last election.

Mr. Kirk: We based this in 1972—and we assume that the Government are basing it tonight—on the Council of Europe delegations, which are 18, 16 and two. That has always been the case unless the Government have had an overwhelming majority, as in 1965 and 1956, in which case the Government party has had 19 Members and the leading Opposition party has had 15. That has always been the position with the Council of Europe. We based our calculations in 1972 on the Council of Europe calculations, and I assume that the Government are doing the same tonight. This seems to me to be wholly reasonable.

Mr. Russell Johnston: I dispute the phrase "wholly reasonable". The hon. Gentleman has been operating for two and a half years in the European Parliament, and he has seen for himself that that is not the way in which other countries—with which we shall have to harmonise—operate. Surely he should take that into account.

Mr. Kirk: The hon. Gentleman must not take what has been a factual description as being necessarily what I want to see in the future. In view of the various misstatements about the position, both in 1972 and now, I have described what actually happened and what I assume has happened on this occasion.
My party and I do not accept that it will happen for all time. For one thing we have the prospect of direct elections. For another, now that the Labour Party has agreed to come into full membership of the European Parliament, there is the possibility of consultation, which I would welcome, as I think my party would, about whether there is a better way of doing these things.
But the basis on which they have been done up to now, whether it was right or wrong, at least has been consistent. As a party we have taken the view from the start—and we assume that it was the view of the Labour Party—that the Council of Europe was the only guide we had and that it was the one that we should accept as reasonable and sensible. It is true that in 1972 there were

basically only three parties represented in the House. There are now six—

The Treasurer of Her Majesty's Household (Mr. Walter Harrison): Eight.

Mr. Kirk: I defer to the Deputy Chief Whip. He obviously knows more than I do about the splits in his party. Anyway, there are many more parties in the House now than there were then.
Therefore, we think it not unreasonable that there should be consultations in the near future between the parties about whether we can find a better way of doing this. I hope that the Patronage Secretary will accept this as a reasonable offer. We would like to join in such discussions, and I hope that other parties will do so. For the time being we believe that this is the right way of doing it.
Although there have been many shots across our bows, most of the flak has been directed at the Government benches. I recall when the delegation was first made up. I apologise to the hon. Member for Newham, South (Mr. Spearing) for using the word "delegation" but I cannot think of a better word. When we first asked Members to go to the European Parliament we had a majority of, I think 40, and we accepted 18 seats. The Government now have an overall majority of one. They have taken 18 seats, and we have accepted 16 as the leading minority party. I do not think that one can be much fairer in regard to party balance within the House.
Throughout the whole two and a half years, although from time to time there have been rude noises about the Members of the European Parliament, we have conducted these affairs with a considerable amount of give and take on all sides. I hope that tonight we shall pass the motion, even though it does not affect any Member of my party, in the confident belief that, although the appearance of Labour Members at the European Parliament will undoubtedly give a considerable shock to the Socialist Group there, it will nevertheless lead to the furtherance of European unity.

1.59 a.m.

Mr. Mellish: I apologise for the absence of my right hon. Friend the Leader of the House, who normally deals with this and all other matters concerning


House business. I was asked by him and others to deal with it because I have been very much involved in what has become the famous selection system of the Labour Party. In arriving at the names which appear on the Order Paper I was very much involved in selecting those individuals. It was felt right that having that experience of the delegation—I am almost frightened to use the word "delegation"—that we are sending to Europe, and knowing also something of the background of how these numbers were made up, I should reply to the debate.
I understand the feeling of the right hon. Gentleman the Leader of the Liberal Party about this matter, for which I genuinely have a lot of sympathy. However, I do not have much of an answer or solution to offer him. All of us ought to understand the situation in which this problem has arisen.
The hon. Member for Saffron Walden (Mr. Kirk) used a phrase which I found offensive—I hope that he will not mind me saying that—about jumping on band wagons. That is something I have never done. Nor have this Labour Government jumped on any European band wagons. What we did was to undertake a democratic process of asking the people of this country whether they thought that Britain should stay in the Common Market. I speak as a good pro-Marketeer. If the British people had decided that we should not stay in the Common Market, my Labour Government would not have sent any delegation to Europe. Therefore, there is no question of jumping on band wagons. The fact is that it was a natural outcome of the decision of the people that we then decided to take our full responsibility in the European Parliament.
Here was a situation in which the Labour Party had not yet become involved in any of the affairs of Europe as such, and therefore the whole of the 36 seats were at the disposal of the then Government, the Conservative Government. It is perfectly fair to say that they offered the Labour Party of that day 16 seats, which they did not accept. The then Government were in a position in which, apart from sending their own delegation, they could be very generous with anyone and everyone. That is how we come to get the independent peer who has been mentioned—which has been

confirmed—and how it was that immediately, without hesitation, the Conservative Government offered the Liberal Party two seats. I understand that those individuals both the noble lord, Lord Gladwyn and the hon. Member for Inverness (Mr. Johnston), have done a first-class job in Europe.
But that position changed when we as a Government, after the referendum, decided to take up our own seats.
Where does the formula come from? The hon. Member for Saffron Walden was quite right to refer to this question. This is not something about which the Liberals have not heard. They know about the formulas of this House on representation. The Committee of Selection, for example, in deciding how a Standing Committee shall be selected, has a formula which is very well known in the House. The figures are that the Government of the day get 19, the main Opposition party gets 15 and the others—I do not use that term offensively—two. That is the procedure in the Standing Orders of the House. I did not decide suddenly to invent those. They have always been with us.
Perhaps I may explain the attitude we took when we decided to take our full share of the responsibility in Europe. I immediately said "We shall not apply the Committee of Selection formula of taking 19 seats for the Government party and giving only 15 to the Conservatives and two to the others". I could have done that. There was nothing to prevent my doing it under the rules of the House, because we are the Government party. But I decided to apply what I thought was a much more honourable principle, the principle of how we arrived at the Council of Europe delegation. I therefore turned at once to the main Opposition party and said that we were taking not 19 seats but 18. I offered the Conservative Party 16 seats, which were accepted. That left the two seats for the others.
I understand the immediate difficulties created. However, with respect to the hon. Member for Saffron Walden, who spoke about having sympathy for the Liberal Party, if he is really sympathetic all that he has to do is to give the Liberals one of the Tory seats. He is not that sympathetic. Therefore, let us have no


crocodile tears about that matter. I am not complaining about that. I do not know whether I would do that if I were in opposition.
I am stating the case that the Government party has not been dishonourable in this matter. We could have taken 19 seats. We said that we would not do that but would take 18. If the Conservative Opposition had decided to say "No, we will take the principle of the 15, which is the normal formula for the other precedure, and we will give the extra seat to what are called the 'others'," all would have been well.

Mr. Hooson: I understand that the right hon. Gentleman is saying that the Government took a generous view in not taking the 19 seats. However, as I understand the right hon. Gentleman's description of the selection procedure, the Conservative Party was entitled to 15 seats yet he offered it 16 seats. It seems that he was generous to the Conservatives but not to the minority parties.

Mr. Mellish: That is for the simple reason that I was not unaware that the Conservative Party, as a result of the Labour Party taking its share of the European Parliament membership, would have to make great sacrifices from its point of view. Indeed the Conservative Party has taken two off its delegation as a consequence. We have not heard who it has taken off, and that is none of our business. We are not concerned with that.
We must be straightforward and honest in our approach. Although I understand what the Liberal Party describes as an injustice, I must put it to Liberal Members that if one of them ever had my job, which I do not think likely, that Member would have to approach the matter in much the same way. If I could get agreement from those involved I should be delighted to agree to the representation of two Liberals. That is why we have been waiting on consultation.
Of course, since we took our original stance there has been a change of membership within the House. The Scottish National Party is now a party represented in the House with numbers that give it a right to be considered in parity with the Liberals. The SNP has the right to claim one of the two seats. That was the case

as I saw it, and that was one of the difficulties. Should it be the Government party, the Labour Party or the Conservative Party that gives up one seat to provide it to the Liberals? I do not see any immediate compromise.

Mr. Thorpe: The right hon. Gentleman will be aware that in letters to me the Prime Minister has attached great importance to the fact that under the selection procedure the Government would have been entitled to 19 seats yet they have taken only 18. But is it not the situation that under that procedure the Government have given up one seat to which they would have been entitled and have promptly given it to the Tory Party?

Mr. Mellish: I understand the right hon. Gentleman's complaint about that. I appreciate that being a Liberal he does not like the Tory Party or the Labour Party. That is fair enough. I was not unmindful of the fact that the Conservative Party, as a result of the Labour Party going into Europe, would lose at least two seats. The Conservative Party would have lost three seats had we insisted on its having only 15 seats. Of course, there is nothing to stop the Conservative Chief Whip stopping the debate going any further by saying that the extra seat that has been given to his party will be given to the Liberals.

Mr. Kirk: We do not accept that the right hon. Gentleman has given us a seat. We have never accepted that the principle of the Committee of Selection is one properly applied to this sort of issue. We have proceeded from the start on the basis of the Council of Europe procedure. That was why in 1972 we offered the Labour Party 16 seats although at that time we had a majority of 40. Of course, the right hon. Gentleman's party virtually has no majority.

Mr. Mellish: We may not have a majority, but every time we go into the Division Lobbies we seem to come out all right. Last week we had majorities of 62 and 71, so we cannot complain.
I understand that the procedures of the House have resulted in the Liberal Party feeling especially aggrieved. Some of my hon. Friends have joined in the expressions of grief. This situation, over which I have no control, is one which I should like to solve. I am not making


any promises tonight because I do not know of an immediate solution.

Mr. McCusker: As the right hon. Gentleman is referring to majorities, perhaps this is an opportune time for me to interject. It seems that on the basis of what the right hon. Gentleman is saying this will not be a United Kingdom delegation but a Great Britain delegation. When he refers to the representation of the Liberal Party and the Scottish National Party entitling them to representation at Strasbourg, does not the same argument apply to my party?

Mr. Mellish: The more I stay here, the more complicated the matter becomes. The normal lines of communication are open to Irish Members as they are to the Scots and to the Liberals. The Liberals and the SNP Members seem to write to me regularly telling me what they want, but the Irish Members never seem to write to me. I thought that they had enough problems of their own in Ireland without wanting to go to Europe and muck about over there.
If those Members decide to write to me officially demanding to be considered for the delegation, I do not know the answer. How does one divide two into two, other than throwing two in the air and saying "The best man catches either one"? That is not the right way to go about the matter. I concede that there will have to be further discussions and consultations on how we can resolve the position.
Let me deal with the House of Lords and how its membership was selected. It is not for me to question the procedure in another place. There are some Liberal peers there and I have no doubt that they will be very critical. If they are as noisy as the Liberals in this House, it will be a lively debate. I shall not suggest to the other place how it should select its delegation, but it is doing the honourable thing—namely, tabling a motion which will be properly debated.
Let me deal with my own delegation because I was involved in the selection process. At the end of the day we take a decision democratically. My party meeting decided whether the members of the delegation should be elected of selected. Our Members decided, by an overwhelming majority, that delegation Members should be selected by the Chair-

man of the Labour Party, my right hon. Friend the Member for Anglesey (Mr. Hughes) and myself. That was my party's decision. Having done that, they were invited to write asking to be considered.
I found the remarks of the right hon. Member for Devon, North (Mr. Thorpe) somewhat offensive when he talked of some of my hon. Friends as if they were crawling into Europe. It happens to be a fact that the 48 people who wrote asking to be considered are among the finest people in my party. They are genuine people with no desire other than to serve the European Parliament to the best of their ability and to change it or alter it where they think it is right and proper to do so. Therefore, on behalf of those people I resent what was said by the right hon. Gentleman.
By the use of the method which we have adopted, we now have every region in the country represented. We have also ensured the appointment of two Scotsmen, two Londoners and, indeed, representation for the whole country.

Mr. Penhaligon: The nearest representative to Truro in this respect is 200 miles distant. Will not this arrangement mean that my area is the worst represented in the whole country?

Mr. Mellish: That is another nationalist argument, is it? I thought that Cornwall was in England. I was under the impression that within its area or region Cornwall was part of the rest of the country. Forgive me if I am wrong about that.
I understand the concern which has been expressed by the Liberals in this debate. I ask them to believe that there was nothing malicious about this arrangement. I am still prepared to discuss with the Liberal Party and the SNP how this difficulty can be overcome. This is not the end of the story but is the beginning for those interests since further motions will have to be tabled if the SNP Members are to be included. It will be understood, I hope, that Conservative nominees have already been approved by the House.
The alterations that have been made have been made in the other House where two of their Lordships are being deleted from their list, but the House has approved the Conservative list and the proper way to do this would be to put it down after further discussion and agreement. There is no reason why


another motion cannot be put down when it is decided how the remaining two places are to be dealt with.
The Liberal Member has already had his name approved and we are really talking only of the one Scottish National. This will have to be done by a further motion, and in the light of the information I have given—that this has been done without any malice to any other party in the House—I hope that the House will approve.

Mr. Gordon Wilson: I am grateful for what the Patronage Secretary has told us, but the question still arises that if one postulates that the House of Lords, in considering its motion, approves of a Liberal representative there, according to my information that would effectively fill the delegation to the European Assembly and thereby disfranchise the Scottish National Party. Would it be possible in those circumstances for the matter to be brought back to this House, and would we have powers to override what the other House had done?

Mr. Mellish: If the other place did what the hon. Member for Dundee, East (Mr. Wilson) has said, it would fill up the other seats and would deprive me of the chance to offer the SNP one seat; but I do not think that that is likely to happen. It is not a supposition I am prepared to accept. It is not going to happen. It is up to the House of Lords to decide, but I can tell the hon. Member what it has done and what I have done has been honourable.

Mr. Russell Johnston: While the Patronage Secretary may be totally lacking in malice, which, as a right hon. Gentleman he is well known for being, it really is the most disgraceful of all solutions that he should be saying that the allocation of the one remaining place should be up to negotiation between the Liberals and the SNP, which is essentially what he said, particularly as he has already indicated to the House that the rules or traditions upon which he based his original proposals are not inviolable and can be changed. Surely there is a requirement for major parties to make a concession to democracy.

Mr. Mellish: The Conservative Chief Whip has heard every word that has been

said. If his heart has been touched by the pleas that have been made, I shall be willing to agree that through the usual channels.
I say again that I did not invent the formula but inherited it and applied it honourably and fairly without vindictiveness against the Liberals or any other party.
If I had been so arrogant as to say "It will be given to the Liberals", there would have been criticism and I should have been accused of arrogance. There will have to be further discussion, not only on this but about other delegations. That is my case and on that I stand.

2.19 a.m.

Mr. David Steel: I shall be very brief. In all the time I have known the Government Chief Whip and had pleasant dealings with him when I held that same responsibility for my party, I never knew anyone who could wield a sledge-hammer with greater charm. He has done it again tonight. He was pleasant and gracious and gave nothing away. He did not concede any of our arguments about the manner in which the whole question has been handled and the way in which we were led to believe that we would be reduced from two Members to one in the European Parliament.
The greatest single criticism is that in no other organisation, whether in Committees of this House or in deputations or delegations of any kind to other bodies such as the Council of Europe, would we set about it in this piecemeal manner. There would and should surely have been some opportunity to discuss the names in the motion. That opportunity has not been afforded to us. Having accepted the referendum result, we have had no opportunity of discussing the composition of the delegation that we should send to Strasbourg.
The Labour Party has had its own internal debate. Democracy has worked there. But what is good for the Labour Party internally is too good for the House of Commons as a whole. We cannot accept that situation. It is a little late to offer consultation after names have been included in motions on the Order Papers of both Houses.
In effect, the Government have said "We would have been entitled to 19. We


have decided to take 18. Therefore we are satisfied, and that is the end of the story." The Opposition have said "We wanted 16. We have 16, and that is the end of the matter as far as we are concerned."
I thought that my hon. Friend the Member for Inverness (Mr. Johnston) was unfair in describing the hon. Member for Saffron Walden (Mr. Kirk) as mute and miserable. The hon. Gentleman was not mute, but he made it clear that he was being miserable by not giving anything away having got what he wanted. Concepts of fairness of representation are not of the slightest concern to the Opposition. They have what they wanted, and that is the end of the story.
It is not good enough to quote the Council of Europe delegation. That was drawn up years before there was a United Ulster Unionist Party, a Scottish National Party or a Liberal Party with such strength in the country represented in this House. Therefore, it is no use dredging up the composition of a delegation formed 20 years ago to justify the composition of the delegation for the European Parliament.
Both the Government and the Opposition have failed to observe the assurances which were given to the House during the passage of the European Communities Bill. At that time the right hon. and learned Member for Hexham (Mr. Rippon), then Chancellor of the Duchy of Lancaster, in an intervention in my speech, specifically said that it was right that, when the time came to send our delegation to the European Parliament, a Select Committee of this House should consider the method of selecting representatives from both Houses of Parlia-

ment. The Opposition have not said that today. The right hon. Member for Ebbw Vale (Mr. Foot), now a member of the Government, went well beyond that and said that that was the minimum which would be required in terms of discussion before we got down to passing motions of this kind.

Obviously, if the Government insist on going ahead tonight by moving the closure and rallying their troops to get their majority, the minority parties are entitled to say that they are not satisfied with the answers they have had. There is no reason why the delegation should not consist of 17 Labour Members, 15 Conservative Members, two Liberal Members and one Member from each of the other parties. Indeed, the hon. Member for Armagh (Mr. McCusker) made the fair point that his party represents the whole of one section of the United Kingdom and is therefore entitled to a representative. I see no reason why a delegation of that sort of composition, which would more accurately reflect the views of the people of this country, is not the right one to go forward into Europe.

If we lose the debate tonight, it will be carried on in another place whenever the motion is moved there.

Mr. Cyril Smith: Mr. Cyril Smith rose—

Mr. Walter Harrison (Treasurer of Her Majesty's Household): Mr. Walter Harrison (Treasurer of Her Majesty's Household) rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 119, Noes, 11.

Division No. 262.]
AYES
[2.45 a.m.


Allaun, Frank
Coleman, Donald
Flannery, Martin


Archer, Peter
Cook, Robin F. (Edin C)
Fletcher, Ted (Darlington)


Armstrong, Ernest
Cox, Thomas (Tooting)
Fowler, Gerald (The Wrekin)


Ashton, Joe
Crawford, Douglas
Garrett, John (Norwich S)


Bagier, Gordon A. T.
Cryer, Bob
George, Bruce


Bain, Mrs Margaret
Cunningham, Dr J. (Whiteh)
Golding, John


Barnett. Guy (Greenwich)
Dalyell, Tam
Graham, Ted


Bates, Alf
Davis, Clinton (Hackney C)
Hamilton, James (Bothwell)


Bean, R. E.
Deakins, Eric
Hardy, Peter


Bishop, E. S.
de Freitas, Rt Hon Sir Geoffrey
Harper, Joseph


Bottomley, Rt Hon Arthur
Dempsey, James
Harrison, Walter (Wakefield)


Bray, Dr Jeremy
Dormand, J. D.
Henderson, Douglas


Brown, Robert C. (Newcastle W)
Dunnett, Jack
Howell, Denis (B'ham, Sm H)


Buchan, Norman
Dunwoody, Mrs Gwyneth
Huckfield, Les


Campbell, Ian
Edge, Geoff
Hughes, Mark (Durham)


Canavan, Dennis
Ellis, John (Brigg &amp; Scun)
Hughes, Robert (Aberdeen N)


Carmichael, Neil
Ellis Tom (Wrexham)
Hunter, Adam


Clemitson, Ivor
English, Michael
Irvine, Rt Hon Sir A. (Edge Hill)


Cocks, Michael (Bristol S)
Evans, Ioan (Aberdare)
Irving, Rt Hon S. (Dartford)


Cohen, Stanley
Evans, John (Newton)
Jackson, Miss Margaret (Lincoln)




Jones, Alec (Rhondda)
Ovenden,John
Taylor, Mrs Ann (Bolton W)


Jones, Barry (East Flint)
Owen, Dr David
Thompson, George


Lamborn, Harry
Palmer, Arthur
Tinn, James


Lamond, James
Prescott, John
Tomlinson, John


Litterick, Tom
Price, C. (Lewisham W)
Wainwright, Edwin (Dearne V)


MacCormick, Iain
Richardson, Miss Jo
Ward, Michael


McElhone, Frank
Roderick, Caerwyn
Watt, Hamish


MacFarquhar, Roderick
Rodgers, George (Chorley)
Welsh, Andrew


McGuire, Michael (Ince)
Rooker, J. w.
Williams, Alan Lee (Hornch'ch)


McNamara, Kevin
Rowlands, Ted
Wilson, Alexander (Hamilton)


Marks, Kenneth
Ryman, John
Wilson, Gordon (Dundee E)


Marshall, Dr Edmund (Goole)
Sandelson, Neville
Wilson, William (Coventry SE)


Mellish, Rt Hon Robert
Silkin, Rt Hon S. C. (Dulwich)
Winterton, Nicholas


Mikardo, Ian
Silverman, Julius
Woodall, Alec


Miller, Dr M. S. (E Kilbride)
Skinner, Dennis
Wrigglesworth, Ian


Mitchell, R. C. (Soton, Itchen)
Small, William
Young, David (Bolton E)


Molloy, William
Smith, John (N Lanarkshire)



Morris, Alfred (Wythenshawe)
Spearing, Nigel
TELLERS FOR THE AYES:


Morris, Charles R. (Openshaw)
Stoddart, David
Mr. James A. Dunn and


Murray, Rt Hon Ronald King
Stott, Roger
Mrs. Betty Boothroyd.


Noble, Mike
Strang, Gavin





NOES


Brotherton, Michael
Penhaligon, David



Freud, Clement
Ross, Stephen (Isle of Wight)
TELLERS FOR THE NOES:


Hooson, Emlyn
Steel, David (Roxburgh)
Mr. A. J. Beith and


Howells, Geraint (Cardigan)
Thorpe, Rt Hon Jeremy (N Devon)
Mr. Cyril Smith.


Johnston, Russell (Inverness)
Wainwright, Richard (Colne V)



Pardoe, John

Question accordingly agreed to.

Main Question put accordingly:—

The House divided: Ayes 119, Noes 11.

Division No. 263.]
AYES
[2.34 a.m.


Allaun, Frank
Evans, John (Newton)
Noble, Mike


Archer, Peter
Flannery, Martin
Ovenden, John


Armstrong, Ernest
Fletcher, Ted (Darlington)
Owen, Dr David


Ashton, Joe
Fowler, Gerald (The Wrekin)
Palmer, Arthur


Bagier, Gordon A. T.
Garrett, John (Norwich S)
Prescott, John


Bain, Mrs Margaret
George, Bruce
Price, C. (Lewisham W)


Barnett, Guy (Greenwich)
Golding, John
Reid, George


Bates, Alf
Graham, Ted
Richardson, Miss Jo


Bean, Ft. E.
Hamilton, James (Bothwell)
Roderick, Caerwyn


Bishop, E. S.
Hardy, Peter
Rodgers, George (Chorley)


Bottomley, Rt Hon Arthur
Harper, Joseph
Rooker, J. W.


Bray, Dr Jeremy
Harrison, Walter (Wakefield)
Rowlands, Ted


Brotherton, Michael
Henderson, Douglas
Ryman, John


Brown, Robert C. (Newcastle W)
Howell, Denis (B'ham, Sm H)
Sandelson, Neville


Buchan, Norman
Huckfield, Les
Silkin, Rt Hon S. C. (Dulwich)


Campbell, Ian
Hughes, Mark (Durham)
Silverman, Julius


Canavan, Dennis
Hughes, Robert (Aberdeen N)
Small, William


Carmichael, Neil
Hunter, Adam
Smith, John (N Lanarkshire)


Clemitson, Ivor
Irvine, Rt Hon Sir A. (Edge Hill)
Spearing, Nigel


Cocks, Michael (Bristol S)
Irving, Rt Hon S. (Dartford)
Stott, Roger


Cohen, Stanley
Jackson, Miss Margaret (Lincoln)
Strang, Gavin


Coleman, Donald
Jones, Alec (Rhondda)
Taylor, Mrs Ann (Bolton W)


Cook, Robin F. (Edin C)
Jones, Barry (East Flint)
Thompson, George


Cox, Thomas (Tooting)
Lamborn, Harry
Tinn, James


Crawford, Douglas
Lamond, James
Tomlinson, John


Cryer, Bob
Litterick, Tom
Wainwright, Edwin (Dearne V)


Cunningham, Dr J. (Whiteh)
MacCormick, Iain
Ward, Michael


Dalyell, Tam
McElhone, Frank
Watt, Hamish


Davis, Clinton (Hackney C)
MacFarquhar, Roderick
Welsh, Andrew


Deakins, Eric
McGuire, Michael (Ince)
Williams, Alan Lee (Hornch'ch)


de Freitas, Rt Hon Sir Geoffrey
McNamara, Kevin
Wilson, Alexander (Hamilton)


Dempsey, James
Marks, Kenneth
Wilson, Gordon (Dundee E)


Dormand, J. D.
Marshall, Dr Edmund (Goole)
Wilson, William (Coventry SE)


Dunn, James A.
Mellish, Rt Hon Robert
Winterton, Nicholas


Dunnett, Jack
Mikardo, Ian
Woodall, Alec


Dunwoody, Mrs Gwyneth
Miller, Dr M. S. (E Kilbride)
Wrigglesworth, Ian


Edge, Geoff
Mitchell, R. C. (Soton, Itchen)
Young, David (Bolton E)


Ellis, John (Brigg &amp; Scun)
Molloy, William



Ellis, Tom (Wrexham)
Morris, Alfred (Wythenshawe)
TELLERS FOR THE AYES:


English, Michael
Morris, Charles R. (Openshaw)
Miss Betty Boothroyd and


Evans, Ioan (Aberdare)
Murray, Rt Hon Ronald King
Mr. David Stoddart.







NOES


Beith, A. J.
Ross, Stephen (Isle of Wight)
Wainwright, Richard (Colne V)


Freud, Clement
Skinner, Dennis



Hooson, Emlyn
Smith, Cyril (Rochdale)
TELLERS FOR THE NOES:


Pardoe, John
Steel, David (Roxburgh)
Mr. Russell Johnson and


Penhaligon, David
Thorpe, Rt Hon Jeremy (N Devon)
Mr. Geraint Howells.

Question accordingly agreed to.

Ordered,
That Mr. Guy Barnett, Miss Betty Boothroyd, Mr. Tam Dalyell, Sir Geoffrey de Freitas, Mrs. Gwyneth Dunwoody, Mr. Tom Ellis. Mr. John Evans, Mr. William Hamilton, Mr. Mark Hughes, Mr. R. C. Mitchell, Mr. John Prescott and Mr. Michael Stewart be designated members of the European Parliament:

Ordered,
That this Order be a Standing Order of the House.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

WATERLOO HOSPITAL, CROSBY

2.43 a.m.

Mr. Graham Page: The House has been debating an important matter concerning Europe, a continental matter, and it is characteristic that we can move so quickly from a continental matter to a constituency matter.
I want to raise tonight the question of the future of a hospital in my constituency, the Waterloo General Hospital. For many years Waterloo Hospital has provided the in-patient and out-patient facilities for the district and a 24-hour casualty service for the population of Waterloo, Crosby, Seaforth, Litherland, Hightown, Thornton, Formby and many parishes of West Lancashire. That population looked on this hospital with affection, with admiration, and, indeed, with some possessive pride.
Until 1962 the hospital consisted of a not very modern building but it was certainly adequate. Even before the Second World War there were plans for extending the hospital and for having a fairly substantial hospital on the site. The grounds of the hospital are extensive enough to be able to cope with a building of that sort, large enough for a 150-bed modern community hospital with all the ancillary buildings.
In 1961–62 new out-patient and casualty departments were added, together

with a spacious day room for patients, and this was looked upon in the locality as a first instalment of the development into a larger hospital. Then, however, in February 1966, the regional hospital board, out of the blue, announced that the new, modern and very well-equipped out-patient department at Waterloo Hospital would be closed. The local council—indeed, the local citizens—protested, and then it emerged that the board intended to do even more than that and close Waterloo casualty department and also eventually all the inpatient services.
This was the start of what appeared to be a deliberate running down of Waterloo Hospital and the transfer of its services to Walton Hospital, which is some distance away. The journey from Crosby to Walton, without a car, is a nightmare. The stupidity in taking all casualties on that journey was crass. The lack of consideration and the readiness to accept a danger in making all out-patients travel that distance was quite unbelievable. The hardship to relatives who had to visit patients was cruel.
I need not detail the whole history of the efforts to destroy the hospital—the closure of the operating theatre, the insistence that casualties and outpatients should travel all that way to Walton, the fact that the hospital would become entirely geriatric and the undermining of nursing morale by these proposals for the future of the hospital.
That was at a time when in the district around the hospital there were very great developments—the development of Royal Seaforth Dock, the container terminal built at the expense of £40 million, the biggest grain terminal in the world, massive road developments, a marina, and very substantial housing development at Formby and Hightown. In fact, the whole area was developing very rapidly, and at that very time there were proposals to close its local hospital.
By 1971 it seemed possible that the hospital would eventually become not a general hospital, as it had been, but a


pre-convalescent and long-stay hospital. However, I was not satisfied with those proposals. We needed a general hospital in this area. I had from the Minister of State at the time, Lord Aberdare, something of an assurance that this hospital might be developed into a community hospital. This was in 1972, when the policy was starting to change from the concentration of hospital services within the big hospitals towards the setting up of community hospitals.
I received the assurance in a letter dated 1st June 1972 from Lord Aberdare. He said:
We mentioned to you"—
referring to the discussion which we had had—
another prospective development in policy. Keith Joseph expects to announce in the near future a new policy for the establishment of smaller community hospitals providing a service complementary to that of district general hospitals. Such hospitals, where required, will be sited in close proximity to the communities they serve.
That gave me some hope that we might have the Waterloo Hospital developed as the population of the area required because the population had outgrown the hospital, and to meet that by closing the hospital seemed an entirely ridiculous policy.
I had some assurance about that in a letter from the then Minister of State in September. He pointed out that the general rôle of community hospitals was
defined as providing medical and nursing care including out-patient and day-patient and in-patient care for people who do not need the specialised facilities of a district general hospital, who cannot be properly cared for at home or in residential accommodation. In general the proposed future rôle for the Waterloo Hospital, as you will note, fits within these broad outlines.
That was what I had hoped. I wished to press for the formation of a community hospital by building on to the existing Waterloo Hospital.
Shortly after that, in March 1965, the hospital was closed for fire-precaution work to be carried out. After all the history of this hospital, one could not help but be suspicious about the closure.

The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): I take it that the right hon. Gentleman is referring to March 1975.

Mr. Page: I meant that. If I said the wrong year, I am grateful to the Minister for correcting me. In March 1975 the hospital was closed for this precautionary work to be carried out. I was suspicious that there was some possibility that the hospital might not be reopened, especially because at about the same time the regional health authority came up with several different propositions for the future of the hospital, none of which included the proposal for the hospital to develop into a community hospital.
Five alternatives were put forward in February 1975. These were put before, first, the community health council for the district. That council showed the alternative which would restore the hospital to its previous bed capacity and would merely carry out the fire precaution work that was necessary.
The Sefton Area Health Authority went a little further than that and proposed that there should be an extension to the existing buildings to provide for 30 geriatric in-patients with the addition of a day hospital for 50 geriatric day patients.
I received that information at the beginning of last month by a letter dated 4th June from the Sefton Area Health Authority. This seemed a possibility as a first instalment, perhaps, towards a community hospital. The Sefton Area Health Authority informed me that in addition the authority would be pursuing the question of the expansion of consultant out-patient sessions for ophthalmology and dermatology and that further consideration would also be given to the involvement that general practitioners might wish to have in operating a minor injuries and redressing centre. That certainly would revive the hospital in a specialised form for geriatric patients. I ask the Minister for an assurance that that can be an instalment towards the eventual development of Waterloo Hospital into a community hospital.
Perhaps I should put on record what I mean by a community hospital. I refer to the document issued by the Department of Health and Social Security and the Welsh Office entitled
Community Hospitals: Their Rôle and Development in the National Health Service".


From that one can see that Waterloo Hospital fits neatly into the criteria for community hospitals. It particularly fits into the one which I quoted from a letter:
In general community hospitals are needed to provide medical and nursing care, including out-patient, day-patient and in-patient care for people who do not need the specialised facilities of the district general hospital and cannot be properly cared for at home or in residential accommodation.
The document states specifically that community hospitals may develop on the following lines:
1. They may provide up to half the geriatric beds and most of the beds for elderly persons with dementia needed for the population they serve, up to about 10 beds per 10,000 population served.
In my constituency in the area of this hospital there is a fairly large number of elderly people's homes, and the elderly are a large proportion of the general population. Therefore, a geriatric service is appropriate here. Also, we need the general hospital service.
The document continues:
2. They may provide up to one-fifth of the medical and surgical beds for their population. This will consist almost entirely of general medical and pre-convalescent beds and beds used for short-term admissions to relieve families, up to about five beds per 10,000 population served.
3. They may thus contain up to about one-quarter of the future bed requirement of their population, between 50 and 150 beds for a population between 30,000 and 100,000.
4. They may provide up to half of the geriatric day places need for their population and of the day places for elderly persons with dementia amounting together to some 3·5 to 4 places per thousand of the elderly population in the locality as well as some day places for other mentally ill patients.
5. They may provide a considerable number of out-patient clinics.
That is the kind of hospital that is necessary in this developing area in the neighbourhood of Crosby. If the hospital closes as a general hospital, there is in the whole area of Sefton metropolitan borough, as it is now, only one hospital, and that is right at the north end of the borough in Southport.
Sefton borough consists of a long stretch along the Mersey coast. It will be extremely inconvenient if that strip is left with only one hospital right at the north of the area, whereas Waterloo Hospital is well placed and comes very

much within another criterion mentioned in the document, which says:
In all types of area, accessibility and convenience to patients and their relatives are important factors in determining where the community hospital should be located. Thus a study of communications is an essential prerequisite in choosing a site. The availability of staff is also a critical factor, including the willingness of general practitioners who live near the hospital to devote time to working in it.
It seems that Waterloo Hospital in Crosby is an admirable hospital to develop into a community hospital. Therefore, I ask the Minister to give me an assurance that if we proceed with the development that the Sefton Area Health Authority desires—at present, the building for 30 geriatric beds and the accommodation for 50 geriatric day patients—this will be an instalment of the proposed community hospital.
I know that if one sets out plans for the building of a hospital by instalments, whether over five years or 10 years, an economic crisis may arise during that period which will mean that we must roll it on. But I want to see this hospital become by instalments a community hospital, and I urge the Minister to give me the assurance that he would like to see that happen. If we are to have the policy of developing community hospitals throughout the country to supplement the bigger district hospitals, here is an admirable place to build one.
Right next door to this hospital is a private convalescent home, the Park House Convalescent Home, which can call on all the finest consultants in the area. They come across the road to Waterloo Hospital and are only too pleased to serve that hospital.
So we have all the facilities there. The hospital is in the right place in the district and it can call on the right services. I hope that I can have from the Minister tonight the assurance that it will eventually become a community hospital.

3.2 a.m.

The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): First, I express my appreciation to the right hon. Member for Crosby (Mr. Page) for raising this subject for debate. I am grateful to him also for the informed interest he has taken over the years in health services in his constituency.


The right hon. Gentleman opened the debate with a full account of the problems which the health authorities have been tackling in relation to the Waterloo Hospital in Crosby, in which he clearly takes a great deal of genuine pride. He has shown a continuing concern for the future of this hospital. I shall do my best in the time available to deal with the points he has raised.
With the reorganisation of the health services, the prime responsibility for managing the health services in its area is vested in the area health authority. It is responsible for providing, or arranging for the provision of, comprehensive health services to the people of its area. In each district, the area health authority works through the officers of the district management team. These officers are responsible for managing and co-ordinating the operational services of the health service within the district. They are responsible also for formulating policies and plans for the services they manage and co-ordinate.
As the right hon. Gentleman knows from his correspondence with us, my Department has followed with interest all recent developments in connection with Waterloo Hospital. We are satisfied that the proposals now being formulated for the future of the hospital have been fully discussed between the district management team, the area and regional health authorities and the community health council. These proposals, in taking full account of the opinions of all three parties, represent the considered views of those who are best able to assess the health of the local population in the light of the constraints imposed by limited resources of finance, skilled manpower in the area and other relevant factors.
There are certain aspects of the developments which are taking place at Waterloo Hospital, which have already been outlined by the right hon. Gentleman, on which I should like to lay particular stress. A change in the rôle to be played by the hospital, in the provision of health services in what is now the southern district of the Sefton area, was first considered by the former regional hospital board in 1969. In that year the board considered the future of overall hospital services in the district after the

new 652-bed district general hospital at Fazakerley, then under construction, was completed.
That hospital, which was commissioned in 1973 to 1974, was planned to provide, in conjunction with the nearby Walton Hospital, a full range of acute and accident and emergency services for residents of the district. The plan was to replace a number of small hospitals, many of which were built in the last century. At the time when the hospital board undertook its review the provision at Waterloo Hospital included a small accident department with 50 back-up beds for patients requiring minor surgical procedures. On a number of occasions, however, because of shortage of staff, it has in the past few years been necessary to close the department.
As right hon. and hon. Members will perhaps be aware, following the report, published in 1962, of the sub-committee of the standing medical advisory committee on accident and emergency services at district general hospitals—which was chaired by Lord Platt—my Department has placed special emphasis on the importance of centralising accident and emergency services at departments in district general hospitals. At these hospitals scarce resources of skilled manpower can be concentrated and full back-up services and consultant cover are available to deal with the full range of emergencies which might present themselves at any time of the day and night.
The optimum size of population to be covered by accident and emergency departments has been recommended as 150,000. It is felt that there are very few areas where distances are so great and transport so difficult that a single unit could not provide for such a population. In keeping with this policy, the former Liverpool Regional Hospital Board considered the future of the accident and emergency department at Waterloo. The board also took into account the absence of hospital accommodation for the elderly in the Crosby area. I do not think I need stress the value of providing accommodation for old people requiring longterm hospital care in their home area, where they may be visited more frequently by friends and relatives and so keep better in touch with their local community.
In its proposals for the rationalisation of hospital services in the North Merseyside area, the former hospital board included the closure of three existing hospitals and the conversion of Waterloo to a long-stay elderly and pre-convalescent hospital. There were consultations on these proposals with interested parties during 1971 and 1972. I understand that in January 1972 the right hon. Member himself met the then Under-Secretary of State for Health.
Generally speaking those consulted agreed to the proposals, and in May 1973 the former Secretary of State gave approval to the board's scheme including the change of use at Waterloo. As a direct result, the accident department at Waterloo Hospital was closed on 29th June 1974, and patients requiring accident and emergency services are now being referred to Walton Hospital, about four miles away.
Meanwhile the Sefton Area Health Authority, which took over responsibility for the management of the hospital in April 1974, had been developing proposals for an upgrading of the facilities of the hospital to make them suitable for geriatric patients. For this purpose it consulted the architectural staff at the Mersey Regional Health Authority, which expressed particular concern about potential fire hazards. A meeting was therefore arranged with representatives of the Merseyside Fire Brigade, which concluded that there would be serious fire risks if the authority's plans were put into effect without modification of buildings. This was not the first time fire officers had examined Waterloo Hospital and already a number of improvements had been carried out to meet their earlier requirements. I understand that their advice now, however, was that some substantial alterations would be required to make the premises safe for geriatric patients.
In view of recent tragedies resulting from fires at institutions for the elderly, I do not think anyone would wish to censure either the fire brigade or the health authorities for their caution. The House will not need reminding of the tragedy at the Fairfield Home in Nottinghamshire last December when 18 old people lost their lives in a fire.
Until the building alterations could be carried through at Waterloo, the number of patients who could remain in the hospital had to be reduced to a level that was felt to be impracticably low. It was, therefore, decided that the remaining patients should be transferred to other hospitals.
The regional health authority's architects then arranged for a full structural survey to be carried out. In the light of this survey the regional authority submitted to the area health authority a choice of five schemes both to achieve the upgrading and overcome the fire hazard. The area health authority considered the schemes at a meeting on 30th May and decided in favour of one which would provide 30 beds for geriatric patients and a 50-place geriatric day hospital. The estimated cost is £350,000 of which £150,000 will be required for the day hospital.
I take this opportunity to pay tribute, as I know the right hon. Gentleman does, to the valuable work done over the years by the League of Friends of Waterloo Hospital. Its work is well epitomised in the magnificent day room built by the league as a result of voluntary subscriptions. I understand that the room is being used for the provision of rehabilitation facilities for patients attending the hospital. This may, in the period when there are no in-patients in the hospital, mean that the room is under-utilised, but once upgrading has been completed it will provide a most essential element in the service being provided by the hospital.
I also wish to mention the interest shown by the Waterloo Hospital Action Committee in the future of the hospital. Though members of the committee may feel that the health authorities locally have taken insufficient note of their representations, I can assure them that the views they have expressed have been fully taken into account in arriving at decisions on the future of the hospital.
Moreover, I understand that the secretary of the action committee is herself a member of the community health council for the South Sefton district, which enables her to bring the views of her committee to the attention of both the council and the authority. The authority has throughout its consideration of


the future of the hospital given particular attention to the need to keep the community health council in touch with developments. I understand that the chairman of the council was informed of the problems that had arisen over the implementation of plans for the upgrading of the hospital before the meeting with fire officers took place. Afterwards the chairman of the health authority wrote to the council explaining why it was necessary to withdraw in-patient facilities, and also enclosed a note of the meeting.
Inevitably, in a situation where important decisions have to be taken within a limited time, feelings may be aroused

that consultation has been inadequate. I am satisfied that the health authorities are fully seized of the importance of giving the community health council the fullest possible opportunity to consider proposals and to contribute ideas from its knowledge of local conditions.
The council is being consulted on—

The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at thirteen minutes past Three o'clock a.m.